Nestle India's Profit Drops 5% Due To Rise In The Cost Of Coffee And Cocoa

New Delhi : FMCG major Nestle India Limited on Thursday reported a 5 per cent year-on-year (YoY) decline in net profit to Rs 885.4 crore for the January–March quarter (Q4) of FY25, primarily due to rising raw material costs.

The company faced mounting pressures from increased prices of key commodities such as coffee, cocoa, and milk, which dented overall profitability during the quarter, according to its stock exchange filing.

Export sales also fell sharply, registering an 8.65 per cent drop YoY. This decline in exports dragged the company’s overall sales growth down to 3.7 per cent, despite a moderate improvement in domestic demand.

Persistent cost inflation remained a major challenge. While edible oil prices remained stable, surging costs of coffee, cocoa, and milk -- particularly with the onset of summer -- added pressure to the company’s bottom line.

Nestle India said profitability was squeezed even as it tried to maintain momentum in its core product categories.

“Volume growth is a strong indicator of consumer resilience and improved sentiment in a challenging macro environment,” said Suresh Narayanan, Nestle India Chairman and Managing Director.

“However, persistent cost inflation continued to pressure profitability,” Narayanan mentioned, adding that continued investments in innovation and distribution are helping drive market share across categories.

However, the company saw a 4.2 per cent YoY rise in domestic sales, which reached an all-time high of Rs 5,235 crore.

This growth was supported by improved consumer sentiment and increased volume sales across urban markets, especially in the core food and beverage segments.

The company also declared a final dividend of Rs 10 per equity share for FY25, with the record date set for July 4 and payouts starting from July 24.

This comes on top of earlier interim dividends distributed during the financial year, the company stated in its filing.

The FMCG major said that growth in its e-commerce vertical was driven by better product availability, tailored online packs, and targeted media campaigns.

Disclaimer: This story is from the syndicated feed. Nothing has been changed except the headline.