Preeyam Tolia, Equity Research Analyst – FMCG and Retail, Axis Securities, says “what has worked for Nestle is new product development. The new launches which the company has done in the last few years are working for them. Also their expansion into smaller towns. Most of the FMCG companies are highlighting that the rural is seeing pain but Nestle is expanding into smaller towns. The growth is also led by this kind of activities for the company.”
How is Nestle looking to you on the first cut and what is the volume growth number that you are looking at as of now?
The overall numbers and the trends are pretty strong and that is in line with our estimates. What we anticipated was a volume growth of 4-5%, kind of single digit volume growth. We expect that the volume growth will be more or less in line with that number as the top line growth has been in line, slightly lower than our estimate but overall a good set of numbers especially on the margins front.
So, what has worked for Nestle is new product development. The new launches which the company has done in the last few years are working for them. Also their expansion into smaller towns. Most of the FMCG companies are highlighting that the rural is seeing pain but Nestle is expanding into smaller towns. The growth is also led by this kind of activities for the company.
Could you give us an indication in terms of the milk and nutrition segment as well? As of now, the company is highlighting that they are seeing decent