Nestle India sees double-digit growth in culinary, milk segment
By Pradeep Rane | 29 Sep 2003
Mumbai:
Even as it has exited from the water business, Nestle
India has seen a robust double-digit growth in the culinary
and milk segment.
The company remains one of the very few fast-moving consumer goods (FMCG) companies with a robust growth in revenue and net profits. Among the new bets, Nestle has failed to deliver in the water segment (Pure Life) in India, where globally it is a frontrunner. The company recently announced that it is exiting from the water business.
Excessive provisioning by the company is depressing profitability, say analysts. Overall provisions for the past six years stand at Rs 1.6 billion, with the company having utilised / reversed only 10 per cent of the stated amount.
It is expected that given the parent''s intention of making Nestle a 100-per cent subsidiary, excessive provisions are likely to continue. The analysts are sceptical of such provisions. It is understood that there is unlikely to be any write-back of these provisions in the near term.
Nestle posted a net profit of Rs 2,015.20 million for the year ended 31 December 2002 (FY-02) as compared to a net profit of Rs 1,731.50 million in the previous year ended 31 December 2001 (FY-01). The total income increased from Rs 19,372.30 million in FY-01 to Rs 20,755.80 million in FY-02.