(Reuters) -Nestle India reported a decline in fourth-quarter profit on Thursday due to higher commodity costs.
The Indian unit of Swiss food major Nestle reported a 5.2% fall in standalone net profit to 8.85 billion rupees ($103.5 million) for the quarter ended March 31.
Shares of the company, which were up 1.5% before the announcement, reversed course to slide 1.57% lower.
Indian consumer goods companies have been dealing with a double whammy of high commodity prices and weak urban demand.
Nestle said that the prices of coffee and cocoa, key ingredients in its popular Nescafe drinks and KitKat chocolates, continue to be high.
Meanwhile, muted urban demand has been dampened by high living costs and subdued wage growth.
Nestle’s revenue from operations grew 4% to 55.04 billion rupees ($643.4 million) in the fourth quarter, slower than the 9% growth reported a year earlier.
Its total expenses rose 6.26%.
In contrast, parent company Nestle reported better-than-expected first-quarter organic sales growth as it hiked prices for its Kit-Kat chocolate bars and Nescafe coffee.
Nestle India’s peer Hindustan Unilever’s quarterly profit came in marginally below estimates on Thursday due to weak urban demand and higher costs.
($1 = 85.1660 Indian rupees)
(Reporting by Ananta Agarwal in Bengaluru and Praveen Paramasivam in Chennai; Editing by Sonia Cheema)
