Nestle India's net profit recorded 37% growth to Rs 281 million in Q1'2000,led by 16% value and 40% volume growth in the exports sales.
over the corresponding previous quarter (Rs 205 million). Lower growth in the sales was due to flat domestic sales which is a reflection of price cuts in the coffee business in addition to the adjustment of stocks in the market pipeline.Decline in raw material cost of coffee accompanied by change in the policy of stock valuation enabled the company to increase its operating profit margins to 14.7%.
Stringent working capital control enabled the company in reducing its interest cost by 50% to Rs 38 million in Q1' 2000 compared to Rs 76 million over the corresponding previous quarter.
In the current year Nestle has launched UHT milk and extended the launch of Munch chocolate to other cities.A wider product portfolio coupled with revival of exports to Russia is expected to improve Nestle's profit growth quarter over quarter. Although the company has plan to enter the mineral water market by making an investment of Rs 1 billion nothing has been specified by the company in this area.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407