Maggi rescues Nestle from the ditch

Well-known brand Nestle India Pvt. Ltd., has declared its Q1CY16 results. The food processing industry giant Nestle has posted healthy Q1 results. However as compared to Q1CY15 the results have remained negative.

Company’s consolidated net income has increased by 18 per cent to Rs 2302 crore as against Rs 1959 crore in the last quarter. EBITDA has come in at Rs 535.5 crore as against Rs 387.71 crore, an increase of 38 per cent.
The company follows the calendar year, therefore the results on a (YoY) basis could not be compared. But as compared to Q1CY15, Net income and EBITDA has declined by 9 per cent and 4 per cent, respectively.Net profit is also down by 19 per cent.

The major reason for a timid income was the Maggi crisis. Last year in June 2015, the Food Safety and Standard Authority of India had banned Maggi Noodles, as the famous snack contained Lead in excess of the permissible level. Maggi Noodles were out of  business for 5 months, which had impacted the profit margin. Nestle had to face a loss of around Rs 450 crores.

With Maggi Noodles again occupying 50 per cent market share, the Q1CY16 results have fairly impressed.
Nestle India Ltd. is a food processing - Dairy company. The company's brands are Nescafe, Maggi, Milky Bar, Milo, Kit Kat, Bar One, Milk maid, Nestea, Nestle milk, Nestle Slim Milk, Nestle Fresh, Natural Dahi and Nestle Jeera Raita.

Today the stock is a top gainer in FMCG segment; and is trading at Rs 5858, up by 2.70 percent.