Kit Kat chocolate-covered wafer bars manufactured by Nestle are seen in London, Britain, July 25, 2018. REUTERS/Hannah McKay/File Photo Acquire Licensing Rights
BENGALURU/CHENNAI, Oct 19 (Reuters) – Nestle India (NEST.NS) on Thursday reported third-quarter earnings above estimates on higher demand for its KitKat and Munch chocolates as well as Maggi instant noodles and also said its board approved a stock split.
Profit soared 37.3% to 9.08 billion rupees ($109.06 million) for the three months ended Sept. 30, beating estimates of 8.14 billion rupees, according to LSEG data.
The company’s shares rose as much as 3.9% to 24,168.15 rupees, a record high, after the results.
Well-to-do Indians especially in urban pockets have not shied away from spending on affordable pick-me-ups like chocolates and biscuits, even as prices of essentials, including vegetables and dairy, shot up.
“Domestic sales grew double digit on account of … volume and price,” Managing Director Suresh Narayanan said in a statement.
Revenue from operations rose 9.5% to 50.37 billion rupees, the Indian arm of Swiss chocolatier Nestle SA (NESN.S) said in an exchange filing.
Nestle India reported “a strong set of numbers” in the current context when expectations for the broader sector have been muted, Prabhudas Lilladher Head of Research Amnish Aggarwal said.
The results came in contrast to Switzerland-listed Nestle’s recent fortunes as it posted lower-than-expected nine-month sales growth with higher product prices making shoppers balk.
Nestle India also said its board approved a split of each equity share into 10 to make them more affordable to retail investors. It also declared a second interim per-share dividend for 2023 of 140 rupees.
However, Nestle India said uneven rain would impact the production of major ingredients, including maize, sugar and spices, resulting in prices going up.
The chocolate maker’s peers Dove soapmaker Hindustan Unilever (HLL.NS) and ITC (ITC.NS) would report results later in the day.
Nestle India’s shares have gained nearly 23% this year compared with a 19% rise in the NIFTY FMCG (fast-moving consumer goods) index (.NIFTYFMCG).
($1 = 83.2575 Indian rupees)
Reporting by Ashna Teresa Britto in Bengaluru and Praveen Paramasivam in Chennai; Editing by Sohini Goswami
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