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Yes Securities Report
Nestle India Ltd. delivered strong topline in domestic business with volume growth of ~8% on base of 12% while margins were under pressure amid elevated inflation across key raw materials.
Company took price hikes of ~8.5% on the back of 15% overall inflation. Growth was broad-based across categories with strong double-digit growth especially in prepared dishes and confectionary.
Strong rural growth despite rural headwinds albeit in a low base indicates strong progress on the rurban journey with distribution efforts in semi-urban/rural markets continuing to drive increase in category penetration.
While gross margins have come under severe pressure, Nestle has been able to offset that partially with calibrated price hikes. Double-digit growth across segments other than the challenging milk products business, strong growth in ecommerce business and strong recovery in out-of-home business were positive takeaways.
Acquisition of Purina Pet care and launch of Gerber brand in toddler category displays Nestle’s focus on building long term growth opportunities.
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