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Nestle India gains 3% on launch of Nespresso in India, JV with Dr Reddy’s Laboratories
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Nestle India’s revenue jumped 9.1% in the March quarter of FY 2023-24 to ₹5,268 crore, marginally up from the CNBC-TV18 poll estimates of ₹5,180 crore.
Nestle India Limited shares jumped more 3% on Thursday after the company announced the launch of its premium coffee brand Nespresso in India and a Joint Venture with Dr Reddy’s Laboratories.
The company announced that Nesspresso will be rolled out in Indian markets by the end of 2024.
In a stock exchange filing, the consumer goods major said that it will undertake the sales and distribution of Nespresso products, including machines and capsules, through its distribution network, online channels and boutique outlets. These will be carried out through commercial agreements with Nespresso and third parties.
The rally in the Nestle share price was also aided by strong Q4 results and dividend announcement.
Nestle India Q4 results beat estimates
Nestle India’s revenue jumped 9.1% in the March quarter of FY 2023-24 to ₹5,268 crore, marginally up from the CNBC-TV18 poll estimates of ₹5,180 crore. This is also the first time the company witnesses its domestic sales surpassing the ₹5,000 crore mark.
The company’s profit after tax (PAT) in Q4FY24 increased 27% year-on-year to ₹934 crore. The net profit was above the CNBC-TV18 poll estimates of ₹850 crore.
Its earnings before interest, tax, depreciation and amortisation (EBITDA) increased 21.8% YoY to ₹1,337.7 crore compared to the March 2023 quarter.
The EBITDA margin improved by 270 basis points to 25.4% YoY in Q4FY24.
The company’s Board of Directors at the meeting held on April 25 also recommended a final dividend of ₹8.5 per equity share of ₹1/ each for the 15-month financial year ending March 31, 2024. This dividend pertains to the entire issued, subscribed, and paid-up share capital of the company, which comprises 9,64,157,160 equity shares of a face value of ₹1 each.
JV with Dr Reddy’s Labs
Nestle India Limited also announced the Board nod to a definitive agreement to form a joint venture (JV) with Dr Reddy’s Laboratories Limited. This JV aims to integrate Nestle Health Science’s global range of nutritional health solutions with the nutraceutical portfolios and established commercial strengths of Dr. Reddy’s. The joint venture is likely to commence operations in the second quarter of the financial year 2024-25.
Shares of Nestle India were trading 2.19% higher at ₹2,557.7 apiece, on the BSE at 1.20 pm.
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