Nestle India’s preview of Q2 results: On Thursday, October 17, 2024, Nestle India, the company that makes Maggi and KitKats, is scheduled to release its quarterly results for the July–September period (Q2FY25). The fast-moving consumer goods (FMCG) giant’s adjusted profit is predicted to rise by 7 to 8% to Rs 876 crore from Rs 805.5 crore recorded a year ago, according to brokerages followed by Business Standard ahead of the results.
Operating revenue for Nestle India is anticipated to increase by 5 to 7 per cent year over year to Rs 5,333.05 crore, from Rs 5,010 crore in Q2FY24, as a result of pricing increases implemented by the business. From Rs 4,793 crore in the June quarter, its revenue increased by 11.2% on a quarter-over-quarter basis.
Analysts advised investors to monitor movements in raw materials, competition intensity, and the demand outlook for rural versus urban areas.
Important brokerages anticipate the following from Nestle India’s Q2 results:
Axis Securities
Due mostly to price increases, analysts predict that Nestle India’s sales will increase to Rs 5,318 crore in Q2FY25 from Rs 5,010 crore in the previous quarter. This suggests a 6.2% year-over-year increase. Quarterly revenue growth is projected to be 10.9%.
Furthermore, they anticipate EBITDA to be Rs 1,258 crore as opposed to Rs 1,225 crore year over year. Earnings before interest, tax, depreciation, and amortisation is known as EBITDA.
The rise in coffee and cocoa costs, however, is likely to cause Nestle India’s EBITDA margin to drop Y-o-Y to 23.7% from 24.5%.
Analysts predict that although its profit after tax (PAT) will likely decrease due to exceptional items, adjusted PAT will likely increase by 7% year over year.
Compared to Rs 908 crore a year earlier, PAT for the quarter is expected to be Rs 852Â crore.
Motilal Oswal Financial Services
The broking thinks that because Nestle India raised pricing in response to rising commodity prices, the company’s sales growth momentum will continue throughout the time under review.
Net sales are predicted to reach Rs 5,345 crore in the second quarter, up 6.1% from the Rs 4,658.5 crore recorded in the same period last year.
The EBITDA margin is also expected to moderately increase by 30 basis points (bps) year over year to 25.1% from 24.8%, according to Motilal Oswal analysts.
According to the report, the company’s focus would remain on broadening its distribution network in the interim.
Kotak Institutional Equities
Kotak Institutional Equities analysts see net revenue growth of roughly 7% YoY, driven mostly by a 7%–8% increase in exports and domestic sales.
Compared to Rs 5,037 crore a year ago, the expected income is now Rs 5,362 crore.
They anticipate a 2-3% increase in volume (tonnage), which is an improvement over the previous quarter. This comes after a 4-5 per cent gain in prices, which was fuelled in part by increases in the cost of coffee and chocolate.
Analysts, however, believe that external factors including slower consumption growth, ongoing food inflation worries, and fluctuating commodity prices could have an effect on volume growth.
Nuvama Institutional Equities
The broking believes that Maggi noodles and baby nourishment are slowing down for Nestle India. Additionally, while the cost of coffee and chocolate may still be a concern, Nuvama experts predict a slow trickle-down to final customers.
Additionally, it projects revenue, EBITDA, and volume to increase 4.9%, 5%, and 3% year over year. The broking has projected Rs 5,282 crore in sales and Rs 1,286.7 crore in EBITDA for the September quarter.
