Hit by MAGGI ban Nestle India profit falls 44 per cent YoY

Nestle India which follows calendar year January to December announced its year ending quarter results on Friday. Hit by the Maggi ban, the local arm of swiss packaged food company reported a 43.8 per cent fall in net profit to  Rs 183 crores for the September-December quarter. 

On financial front, the net revenue from operations of Nestle reached to Rs 1959 crores in Q4FY16 compared to Rs 2531 crores in Q4FY15, a decrease of 22.58 per cent year on year (YoY). Net Domestic Sales decreased by 18.3 per cent. Export Sales decreased by 1.3 per cent impacted by Maggi noodles issue, and lower coffee exports partially offset by export of milk and nutrition products. The EBITDA stands at Rs 388 crores this quarter compared to Rs 550 crores in Q4FY15, a decrease of 29.48 per cent YoY. The EBITDA margin of company stands at 19.79 per cent this quarter compared to 21.72 per cent in Q3FY15. The net profit stands at Rs 183 crores in Q4FY16 compared to Rs 326 crores in Q4FY15, a decrease of 43.87 per cent YoY. 

The net revenue at the year's end from operations decreased by 17 per cent and reached to Rs 8175 crores compared to Rs 9855 crores for the same period last year. The net profit for year stands at Rs 563 crores compared to Rs 1185 crores for the same period last year, a decrease of 52.48 per cent YoY. The exceptional items for the year stand at Rs 501 crores, which relates to loss on account of Maggi stocks withdrawn from market including incidental costs thereto, and estimates of other related costs incurred exclusively in the ordinary course of company’s business. 

Due to a ban imposed by India’s food safety regulator on 5 June after some samples of the snack were allegedly found to contain excess lead and monosodium glutamate the company wasn’t able to sell its popular Maggi instant noodles—a product that accounted for about 30% of sales in 2014—for a period of six months during 2015.

On valuation front the trailing twelve month (TTM) P/E of Nestle is 69.02 as compared to industry P/E of 41.63. Reacting to the numbers the scrip is trading at Rs 5083, up 0.52 per cent from previous close.