Nestle India, the company that owns well-known brands like Maggi noodles and KitKat chocolate, has announced a stock split, making its stock more affordable for many shareholders due to its previously high price. In today's video, we will discuss this Switzerland-based company's stock split, dividend, and its performance in the September quarter. Let's get started.
During the September quarter, the company saw a 9.4% year-on-year increase in sales, driven by strong domestic demand, reaching 5009 crore, which is the highest quarterly number in the company's history. Alongside revenue growth, the company also reported a significant increase in net profits, which grew by 37% year-on-year.
Although specific numbers were not disclosed, the company stated that all its product categories performed consistently well. Domestic sales achieved double-digit growth due to higher volumes, an improved product mix, and pricing strategies.
The company's prepared dish segment, which includes products like Maggi, showed growth momentum, supported by impactful marketing campaigns and targeted consumer engagement initiatives.
Nestle's milk products and nutrition business also witnessed strong double-digit growth. Sales volumes for MILKMAID and PEPTAMEN were higher during the quarter.
The confectionery and beverage category maintained its growth momentum, with products like KitKat, Munch, and Nescafe leading the way.
Positive momentum was observed across all of the company's distribution channels. E-commerce channels contributed 6.1% to quarterly sales, driven by the quick commerce segment. Additionally, organized retail channels continued to deliver strong double-digit growth.
It's worth noting that the impact of uneven rainfall and rain deficits on key commodities such as maize, sugar, oilseeds, spices, and robusta coffee crop yields may affect the company's product pricing in the upcoming quarters, as these are crucial raw materials used in various Nestle products.
Now, let's talk about the much-awaited stock split. Nestle India's board has granted final approval for a 1:10 stock split. A stock split is a corporate action in which a company divides each of its shares into multiple shares. A 1:10 stock split means that the company will split each of its shares into ten shares. In other words, after the stock split, the total number of issued shares will increase by ten times. However, this doesn't mean that the company's value will increase tenfold. The share price will decrease in the same ratio, in this case, becoming one-tenth of its pre-split value.
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