Bangalore, Apr. 29 - Nestle India Ltd. Tuesday said first-quarter net profit rose 48% on year, helped by a tax benefit and healthy local sales growth.
Net profit for the quarter ended March 31 rose to INR1.60 billion from INR1.08 billion a year earlier.
Net sales rose 26% to INR10.91 billion from INR8.63 billion a year earlier.
The results beat market expectations. Mumbai-based brokerage Motilal Oswal had forecast net profit of INR1.34 billion.
The company said net profit in the latest first quarter was boosted by certain tax benefits arising out of factory operations in Pantnagar in the northern Indian state of Uttaranchal, which provides tax incentives to companies.
Adjusting for the tax benefit in this quarter, net profit has grown 38%, the company said in a statement.
The company said earnings before interest and tax margins improved to 20.9% largely due to economies of scale, improved sales channel mix, and strategic steps to mitigate higher raw materials costs.
The company, however, didn't provide the comparable EBIT margin figure for last year.
The company said exports, which rose just about 1% to INR871 million in the quarter, were hurt by lower beverages exports and an appreciation in the Indian rupee compared with the same period last year.
"Whilst there have been recent concerns about a slowdown in the economy, we believe that the growth potential of India continues to be strong, though there might be some moderation in the pace of growth," Nestle India Chairman and Managing Director Martial Rolland said in the statement.
Rolland added that commodity prices remained at high levels and posed a strong challenge, as did staff and related costs.
The Indian unit of Swiss-based food company Nestle S.A., which makes products like Everyday dairy whitener, Kit Kat and Munch chocolates and Maggi noodles, has faced high milk and wheat prices.