Nestle India Q2 results: Net profit likely to rise 26.6% to ₹690 crore; revenue growth seen at 15.7% YoY

livemint.com:

Nestle India is set to report its earnings for the April-June quarter of 2023 on Thursday. The FMCG major is expected to show decent earnings growth with improvement in margins during the quarter. The demand momentum for consumer companies improved in the April-June quarter with the urban market leading the charge and rural showing signs of recovery too.

The urban market continues to lead growth while rural is also showing signs of improvement in demand both sequentially and yearly, as companies have started to pass on the benefits of lower commodity costs to consumers, analysts said. Also Read: Colgate Q1 Results: Net profit up 31% to ₹273.7 crore, net sales jump 10.8% The prices of most commodities have started to decline while some remained stable. This is expected to aid operating margins of the FMCG companies.

Demand for the sector is expected to witness a gradual recovery led by moderating inflation, improving consumer confidence, and an increase in government spending. Nestle India, in line with the sectoral performance, is likely to witness decent revenue growth with margin expansion during the quarter ended June 2023. Nestle India’s net profit during the June quarter is expected to rise 26.6% year-on-year (YoY) to ₹690 crore, as per brokerage poll by Livemint.

The company is likely to witness revenue growth of 15.7% YoY at ₹4,670 in Q2CY23. Gross margins of the company are expected to expand by 55 bps YoY and 70 bps QoQ to 54.5%. At the operational level, EBITDA growth is seen at 28% YoY to ₹1,087 crore, while EBITDA margin is expected to expand by around 200 basis points (bps) to 23%.