FMCG major Nestle India reported 49.95 per cent jump in net profit at Rs 395.03 crore for the second quarter ended June 30, helped by lower expenses.
The company, which follows January-December financial year, had posted a net profit of Rs 263.43 crore for the April-June quarter of 2017-18.
Total income during the quarter stood at Rs 2,758.63 crore. It was Rs 2,525.96 crore in April-June, 2017-18, Nestle said in a BSE filing.
The company said financial results for the reported quarter are not comparable as sales for the June quarter 2017 were reported gross of Excise Duty and net of Value Added Tax (VAT)/ Sales Tax. Excise duty was reported as a separate expense line item.
“Consequent to the introduction of GST with effect from July 1 2017, VAT/Sales Tax, Excise duty etc have been subsumed into GST and accordingly the same is not recognised as part of sales,” the company said.
“The market momentum continued to be favourable and…we have sustained our broad based volume growth across categories. There is an improvement in margins due to favourable cost of commodities and cost efficiency programmes.
“However, we are now witnessing headwinds in commodity prices,” Nestle India Chairman and Managing Director Suresh Narayanan said.
The company said its total sales and domestic sales increased 8.5 per cent and 8 per cent, respectively in the reported quarter.
“The growth rates are adversely impacted due to lower reported sales by the change in structure of indirect taxes and reduction in realisations to pass on the GST benefits.
“On a comparable basis, domestic sales growth is ‘estimated’ at 14.5 per cent supported by increase in volumes on a base impacted by softer trading ahead of the rollout of GST,” the company added.
Nestle India’s total expenses were up 1.49 per cent to Rs 2,163.32 crore as against Rs 2,131.39 crore in the same quarter a year ago.
For the first half of 2018, the company’s net profit also went up 43.64 per cent to Rs 819.06 crore as against Rs 570.19 crore earlier.
The total income during January-June, 2018-19 was at Rs 5,572.3 crore. It was Rs 5,159.46 crore in the same period a year ago.
Meanwhile, in a separate filing, Nestle informed its Board of Directors has declared second interim dividend for 2017-18 of Rs 20 per equity share.
Shares of Nestle India settled at Rs 10,313.30 apiece, down 4.11 per cent on BSE.