The December quarter earnings season is in full swing, with 158 companies set to announce their Q3 results on Friday. One of the key results to watch out for is that of Nestle India, the FMCG major. Brokerages are forecasting a steady Q3 performance for Nestle, with around 10-11% year-on-year revenue growth driven by strong domestic volumes of about 6-7%. However, the company’s profitability is likely to remain under pressure due to higher input costs.
The estimated profit after tax (PAT) for Nestle India is in the range of Rs 713 crore to Rs 740 crore, representing a growth of 2.5-6.5% year-on-year. However, on a sequential basis, the PAT is expected to decline in single digits. The estimates are based on forecasts from various brokerages, including YES Securities, Elara Capital, Deven Choksey Research, and JM Financial.
The management’s focus is likely to remain on volume-led expansion, innovation, and brand investments, which will help maintain the company’s longer-term growth narrative. The Street will be keenly watching the management’s commentary on the commodity price outlook, which will have a significant impact on the company’s profitability.
YES Securities expects Nestle’s PAT to be around Rs 713 crore, up 2.4% year-on-year, reflecting a steady operating performance despite margin pressure. Elara Capital, on the other hand, estimates the PAT to be around Rs 740 crore, up 6.5% year-on-year but down 1.6% quarter-on-quarter, indicating a seasonal moderation post the festive quarter.
Overall, while Nestle India is expected to report a steady Q3 performance, the company’s profitability is likely to remain under pressure due to higher input costs. The management’s commentary on the commodity price outlook and the company’s strategy to mitigate the impact of higher costs will be closely watched by investors and analysts. The results will provide valuable insights into the company’s performance and its ability to navigate the challenges in the FMCG sector.