Nestle India : Amidst the corona virus shutdown, the sectors which prospered are FMCG and Pharmaceuticals mainly. One such FMCG Company is to declare its first quarter stats which are expected to rise. Nestle India is estimated to announce around 8-16 per cent year on year in March quarter profit dur to lower tax expenditure and higher income.
As the corporate tax rate stays reduced from 33.4 per cent to 25.17 per cent. The costs on tax will be diminished which will automatically result in rising revenue. Revenue from operations are expected to rise by 5-8 per cent for this quarter against last year due to the global pandemic situation.
This company adapts January- December as its financial year. Nestle is expected to show a growth of 7.7 per cent in sales due to the lock down. Though the FMCG companies, dealers and retailers are permitted to work during the shutdown, transportation and logistics being a loose handle for the company as distribution to various parts has not been easier with the restrictions imposed.
The company has been on the radar for its positive results since last six to seven quarters due to new product launches, adapting environment, marketing strategies, flexibility and dynamic plans along with big supply chains. Nestle India At operating level the company may not respond and show weak growth due to high milk prices for quarter but in consideration with sales it has shown verified growth.
The gross margin is also expected to decline due to inflation in input prices especially milk and other products. EBITDA is also likely to decline in valuation with other expenses with sales.
But to further look out, its stock has risen up to 70 per cent in the last one year and has gained nearly 19 per cent year to date which was 10 per cent during the March Quarter 2020.
All the costs and expenses have increased along with rise in sales and growth for this quarter. This lock down was fruitful for the company.