Nestle India Posts Good Growth For Q2CY13

Nestle India (NIL), one of the leading brands in the food processing space, posted its Q2CY13 results post market hours on July 26, 2013 (it follows a calendar year). As reported by the company, it posted good growth of 11% to Rs 2223 crore in its revenue, thanks to an increase in its net sales, which includes both domestic and export sales. Sales from the domestic business grew by 9% in the June ended quarter to Rs 2039.5 crore due to net realisations and volume growth in some of its products. The export sales also jumped to Rs 174 crore from Rs 118 crore in Q2CY12, owing to the association with large organisations.

In the current period, due to a rise in cost of materials consumed and other expenses, the operating expenses for the company rose to Rs 1736 crore, which is 11% up from the corresponding period of the last fiscal. The addition in workforce too has led to an increase in the overall expenditure. NIL's net provisions for contingencies rose to Rs 11 crore in Q2CY13, which is just Rs 66 lakh in Q2CY12. Moreover, the depreciation cost for the said period increased by 32% to Rs 89 crore, mainly on account of an increase in its production capacity in Q2CY13 over the last year.

Attributed to higher sales, the EBITDA excluding other income grew by 13%, to reach Rs 486.6 crore. Further, NIL's profit before tax stood at Rs 405 crore, whereas the profit after tax is Rs 271 crore for Q2CY13. This difference arises due to an increase in tax expenses in the June 2013 quarter of CY13, which was a result of the change in income-tax surcharge from 5% to 10% (According to the stated income-tax surcharge change, any domestic company earning over Rs 10 crore in a year needs to pay a surcharge of 10% to the income-tax department with effect from April 1, 2013). The company's operating margin and net margin both mounted by 26 basis points to 21.89% and 28 basis points to 12.21% respectively.

Further, with its June quarter CY13 result, the company announced an interim dividend of Rs 18 per share amounting to Rs 173.55 crore for 2013.