Nestle India to focus on volume growth

Trading at its highest since July 21 and on the back of an announcement that the company will expand operations and focus on volume growth, the shares of Nestle India rose more than 4.8% and were trading at Rs 6,920 on the BSE during Monday’s trade, breaching a one-month high. 
 
As per the announcement, the company will be focusing on aggressively increasing its volume through launch of new products, besides other proactive initiatives, and will be seeking an approval from the management on the same.   
While Nestle India’s margins are largely expected to come down in the turnaround phase due to an impact of higher expenditure on advertisement, it is also expected to pick up from the year 2018 on account of new product launches over the next couple of years. However, recovery by the company is more likely to be gradual as a result of issues related to the company’s core product portfolio. 
 
The company’s shares have gained nearly 9.5% in the current year as of August 25, 2017, against a 23.1% gain in the Nifty Fast-Moving Consumer Goods index.