Nestle India's net profit for Q1 FY25 rose 6.9 percent on-year to Rs 746.6 crore from Rs 698.3 crore in the corresponding quarter of the previous year. The FMCG major's revenue from operations for the April-June quarter rose to Rs 4,814 crore, up 3.3 percent compared to Rs 4,659 crore a year ago.

The FMCG major's April-June earnings growth was helped by a better product mix and sales volume growth. However, the results missed estimates. A Moneycontrol poll of eight brokerages had pegged Nestle India's Q1 net profit at Rs 798 crore, and revenue at Rs 5,060 crore.

"Despite external challenges such as lower consumption growth, concerns on continued food inflation and volatile commodity prices, we have delivered growth across our product groups," said Suresh Narayanan, Chairman and Managing Director of Nestle India. "Almost a fourth of our growth has been mix and volume led, and we hope to strengthen this trend in the coming months," he added.

The commodity outlook, as per the regulatory filing, coffee, and cocoa are facing record-high prices and an ongoing price rally, while cereals and grains are experiencing a structural cost increase due to MSP support. Milk prices, packaging, and edible oils are relatively stable.

During the quarter, Nestle continued to strengthen its distribution infrastructure as part of its RUrban expansion strategy. The company added over 800 new distribution touchpoints including cash distributors, re-distributors, and wholesale hubs. Further, Nestle India expanded its reach to 2.05 lakh villages, adding 5,000 villages, it said.

The beverages business witnessed robust performance with strong double-digit growth led by the summer season. NESCAFÉ CLASSIC posted a double-digit growth. NESCAFÉ Sunrise and NESCAFÉ GOLD also delivered strong growth. The company has launched NESCAFÉ Roastery which has strengthened its premium coffee portfolio.

In the 'prepared dishes and cooking aids' products innovation contributed to 30% of the growth in this quarter. Masala-Ae-Magic saw double-digit growth. KITKAT delivered double-digit growth. Milk products and nutrition portfolio maintained its growth.

E-commerce contributed to 7.5 percent of domestic sales and grew
at double-digit. The Out-of-Home (OOH) business continued its growth momentum despite unprecedented headwinds of extreme weather conditions across India.

Earlier, on 8 July, Nestle India Board of Directors declared an interim dividend of Rs 2.75 per share for the current financial year 2024-25, amounting to Rs 2,65.14 crore. This dividend will be paid on 6 August along with the final dividend of Rs 8.5 for the financial year ended 31 March 2024.

Nestle India shares fell after the quarterly results and were trading at Rs 2,518, down 1 percent from the previous close.