Like Maggi, KitKat’s supplies didn’t stop during the blockade; Why did the coronavirus not harm Nestlé?

E-commerce also lent Nestlé a helping hand and fueled its growth.

As the consumer goods sector is struggling to keep up with supply chains and has primarily reported a decline in sales that bans some products, such as washing hands during the coronavirus blockade, Nestlé India has overshadowed its pairs. The maker of the Munch and KitKat range of chocolates has reported a double-digit increase in domestic sales with its portfolio of Maggi and chocolates driving growth. “Nestlé’s strong sales growth for the quarter compared to declining peer sales indicates a lesser impact of the blockade on its efficient supply chain, as well as potential benefits from increased consumer stocks” an Emkay Global report said Wednesday.

E-commerce also lent Nestlé a helping hand and fueled its growth. Previously, market research firm Nielsen India had said that the coronavirus pandemic will force consumer goods companies to recalibrate their strategies and become aggressive in e-commerce in the coming months.

Key conclusions from the first quarter results

• As of Q1CY20, Nestlé has reported revenue of Rs 33,253 million compared to Rs 31,493 million in the last quarter of 2019.
• The Indian arm of the global consumer goods company posted a 13.54% annual increase in net consolidated earnings at Rs 525.43 crore for the March quarter, compared to Rs 462.74 crore in the same quarter last year .
• Nestlé India’s revenues from operations for the quarter stood at Rs 3,325.27 crore from Rs 3,002.95 crore in the prior year quarter.
• Noodle brand maker Maggi reported total sales growth of 10.8% during the quarter. The growth of national sales was 10.7%.
• Nestlé reported operating profit at 21.7% of total sales.

“The company remained resilient in the first quarter, as the numbers indicate, and delivered volume and a mix that led growth. Maggi, KitKat and Nestlé Munch had excellent results ”, Suresh Narayanan, President and Managing Director of Nestle India. However, growth in certain sectors as outside of the home portfolios remained moderate. In addition, the prices of basic products for milk and its derivatives also increased during the quarter, he added.

Meanwhile, Nestlé India was trading 3.54% below Wednesday’s opening of Rs 17,755 per share at 11:15 a.m.