Nestle India says small town India grew in double digits; to further unlock potential of small markets

Nestle India said it has grown in double digits not just in large metros, but also small towns, the packaged foods maker said in its earnings statement on Tuesday, adding that it will further unlock potential of small towns.

“We are firmly on a journey to accelerate this further by a healthy mix of a customised portfolio, enhanced distribution infrastructure and deployment of resources and localised communication,” the company said in a statement.

Nestle India on Tuesday reported a 5 per cent growth in net profit at Rs 617 crore for the quarter ended September 30. The maker of Maggi noodles and KitKat chocolate had reported profit of Rs 587 crore in the corresponding year-ago period, it said in a BSE filing.

The company said decline in pandemic intensity and increase in vaccination coverage contributed to broad-based growth across all food and beverages categories, and called out coffee and confectionery as categories which grew rapidly.

Nestle, which follows a January to December financial year, reported domestic sales growth at 10.1 per cent to Rs 3,687 crore during the reporting period, driven by volume and mix. The company reported net sales growth of 9.6 per cent to Rs 3,865 crore for the quarter, as against Rs 3,525.41 crore in the year-ago quarter.

Company MD Suresh Narayanan said in a statement: "The quarter has seen the company deliver double‐digit broad‐based value growth in domestic sales across categories.”

Narayanan said in the statement that organised trade witnessed resurgence in the third quarter with strong revenue growth in mid‐twenties after a muted second quarter which was impacted by the second wave of the pandemic.

Nestle said e‐commerce channels showed strong acceleration on the back of convenience and pandemic-driven consumer behaviour.

The company flagged rising costs of packaging materials, rising fuel and transportation costs.

It said out-of-home channels are on recovery path with gradual openings of hotels, restaurants, offices and malls. “There are signs of a return to pre-pandemic levels of business traction in some geographies, categories and channels,” Narayanan said.