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Nestle's Q1 net surges 37%

Apr 25, 2000

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.

(Rs m) 1QFY00 1QFY01 Change
Sales 3401 3480 2.3%
Other Income 15 28 86.7%
Expenditure 2981 2967 -0.5%
Operating Profit (EBDIT) 420 513 22.1%
Operating Profit Margin (%) 12.3% 14.7%  
Interest 76 38 -50.0%
Depreciation 78 92 17.9%
Profit before Tax 281 411 46.3%
Other Adjustments 2 10 400.0%
Tax 74 120 62.2%
Profit after Tax/(Loss) 205 281 37.1%
Net profit margin (%) 6.0% 8.1%  
Earnings per share 2.1 3  

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