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Aditya Sharma    

Mumbai, India

I am a MBA students and simultaneously reading on capital market to get some knowledge on fundamental research where I more focus on business model, opportunity size of the industry and their related parameters who help me out to find out great businesses for the investment. Nevertheless, I always look forward to learn about grow further into the same.

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Contributor since: 2022







Nestle India Limited

A Quarterly Business Q4CY23 and CY22

Q4CY23 and CY22 Result Analysis

Domestic Volume Sales Growth

Growth Over the Years

Quarterly Growth Performance

Segment Wise Growth:

·         Confectionery segment gave a superlative performance in CY22, growing by 25%. Nestle grew ahead of the industry in the confectionery segment, gaining market share in the light wafers and chocolates space

·         Milk and Nutrition grew by 9.5%, with underlying volume growth of ~2-3% and pricing growth of ~6%.

·         Prepared Dishes and Cooking Aids witnessed steady growth of 15.6%, driven by ‘Maggi Noodles’ on the back of media activations and distribution expansion initiatives.

·         Powdered and Liquid Beverages reported a strong 19.2% growth with ‘Nescafe’ having its best year in 2022 and Nestle reaching its highest ever market share in the category.

The e-commerce channel sustained good growth despite higher base from Covid-19 led disruptions and now contributes ~6.5% to the company’s overall sales.

Business Comments – Full Year 2022:

  • E‐commerce: The channel delivered strong accelerated growth driven by new emerging formats such as quick commerce and click & mortar. Quick Commerce growth was fueled by new user acquisition initiatives through targeted digital communication.
  • Organized Trade: The channel continued to witness strong growth across customers and categories.
  • Out of Home (OOH): The channel made a strong comeback in 2022 recovering its pre‐covid base and delivering robust growth. Robust performance was an outcome of revamping, resetting geography, channel and sales priority.
  • Exports: Delivered growth as it continued to expand its presence in new markets through both traditional and mainstream channels. 

Category Performance – Full Year 2022:
Year 2022 witnessed broad based, double digit, volume & mix led growth, despite challenging and highly volatile economic environment.

  • Prepared Dishes and Cooking Aids: Strong growth momentum continued with a healthy balance of product mix, pricing and volume growth in MAGGI Noodles and MAGGI Masala‐ae‐Magic aided by strong consumer engagements, market presence with media
    campaigns and attractive consumer activations.
  • Milk Products and Nutrition: MILKMAID and Ready‐to‐Drink (RTD) registered strong growth. Milk products continued to face challenges due to unprecedented milk price increase.
  • Confectionery: Gained market share and delivered robust growth driven by KITKAT and MUNCH.
  • Beverages: NESCAFÉ Classic, NESCAFÉ Sunrise, NESCAFÉ GOLD delivered broad based double‐digit growth. Recorded highest ever single year growth in household penetration, cemented its leadership position in the category with highest ever market share. NESCAFÉ RTD and out of home also delivered strong double‐digit growth.
  • Pet Food: Pet Food, recently acquired by Nestlé India, continued to provide complete and balanced nutrition for cats and dogs.

Concall Highlights:

  •  Growth in mega cities and metro cities are now in double digits. TC1 and villages growth are in double digits, while TC 2-6 growth moderated to single digits.
  • The total outlet reach is 5.1 mn in 2022. Direct reach has increased from 1.4 mn outlets to 1.5 mn outlets in CY22.
  • Food inflation is an area of concern in the near-term. The company is confident of mitigating inflation through premiumization, cost savings, and calibrated price hikes.
  •  E-commerce has grown 10x in the past six years. Contribution has increased to 6.5% of sales vs. 5.3% in 2021. Growth in e-com is not at the cost of growth in general trade.
  •  Royalty agreement would come for renewal in 2024.
  • The capex in the next three years would be INR 50 bn, of which INR 13 bn would be incurred in CY23, INR 20 bn in CY24 balance in CY25.

Capex Guidance:

Nestle had a capex of ~Rs 5 bn in CY22. However, with most of their facilities working at high-capacity utilisation, the company will be  investing heavily on capacity expansions in the next two years. The company expects to spend ~Rs 13 bn in CY23 and ~Rs 20 bn in CY24. The next two years will see peak capex outlay for Nestle. The thrust on capex should also aid in the new product launches and their scaling up. The capex by Nestle India will be in addition to the roughly Rs 50 bn investment which Nestle SA has planned to make in the next three years. All in all, the next two to three years will see some of the highest levels of capex that Nestle has made in India.

Volume Growth

Value Growth




I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure:

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure:

Disc - Not an recommendation. Source - Company's investor presentation, press release, Earning conference call

Disclosure legality:

I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.


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