Due to the success of its flagship brands Maggi Noodles, KitKat, Nestlé Munch, Nescafé Classic, and Sunrise, Nestlé India has achieved double-digit domestic sales.
“The cost of essential packaging and raw materials are at 10-year highs, and the costs kept rising in this quarter, affecting the earnings from operations as noted previously.” Continued inflation is going to be a critical driver in the short to long term” Chairman and Managing director of Nestle India, Suresh Narayanan, said in a statement during an earnings call with investors.
The company’s sales growth was in line with the 9 % rise it had generated in the preceding three quarters, as well as street estimates. The net profit of the firm for the quarter was at Rs 602 crore, up from Rs 525 crore in 2020.
Narayanan highlighted the company’s progress as a combination of effective marketing, appealing consumer promos, analytics-based consumer insights, geo-targeted distribution strategies, and capitalizing on the festive season’s opportunity.
Driven by volume and mix, the company said it registered a broad-based growth during the quarter.
“Our main brands will continue to perform strongly, with creditable double-digit growth in this quarter for KitKat, Maggi Noodles, Nescafé Classic, Nestlé Munch, and Sunrise.”
Suresh Narayanan said that these products delivered robust performance and achieved double-digit growth as in-home consumption surged, The pace of new launches continued to be strong, which has gathered momentum since 2016. And since 2016, NEST has launched 71 new products, which are contributing 3.4% of sales.
Ad spends at 6.7% of domestic sales were maintained close to 15-year high levels, and thus, supported sales growth and new launches. The ongoing Covid-19 pandemic further continued to boost its online sales.
E-commerce has surged nearly 70% over the last years, accounting for 6.3 percent of the company’s domestic sales. Narayanan, who was the highest-paid FMCG CEO in 2020, saw his pay package increase by 9% in 2021.
According to the company’s annual report, his pay package will increase to Rs 18.8 crore in 2021 from Rs 17.19 crore in 2020.
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