(Reuters) -Nestle India posted a marginal increase in second-quarter profit on Thursday, benefiting from improving urban demand for items such as Maggi noodles and Nescafe coffee, sending its shares up about 5% to a one-year high.
The Indian arm of Swiss food major Nestle said profit before exceptional items and tax edged up to 10.29 billion rupees ($117.07 million) for the September quarter.
It had booked a one-off gain of 2.91 billion rupees in the comparable year-ago quarter from the slump sale of certain businesses.
Shares turned positive after the results, helping lift the Nifty consumer goods index by 1%.
Nestle India, along with peers Hindustan Unilever and ITC, has noted an improvement in urban demand as disposable incomes benefit from a sustained moderation in inflation and the government’s tax cuts.
Quarterly revenue at Nestle India climbed about 11% to 56.44 billion rupees, compared to the 1.3% growth last year that was impacted by weak urban demand.
Sales volume of its popular Maggi instant noodles grew in the double digits, while Nescafe continued to lead the coffee category, the company said.
Chocolate bars such as Munch and Milkybar also recorded strong gains in the category, driven by new launches and Nestle India’s push on hyperfast delivery apps, it added.
Hyperfast delivery apps, which promise doorstep delivery of everyday essentials such as milk and coffee within minutes in large cities, have been consistently driving up sales growth for consumer goods companies in the country.
Domestic sales hit a record high, newly appointed Managing Director and Chairman Manish Tiwary said. He added that the firm would invest in its brands and manufacturing capacity but did not provide further details.
Earlier on Thursday, parent Nestle, the world’s largest packaged food maker, said it has planned 12,000 white-collar job cuts as part of its efforts to be more efficient, after reporting better-than-expected sales growth.
It was not immediately clear if there would be job losses in India.
($1 = 87.8987 Indian rupees)
(Reporting by Ananta Agarwal in Bengaluru and Praveen Paramasivam in Chennai; Editing by Janane Venkatraman)
