Market leader FMCG stock jumps after ₹900 Cr investment in new manufacturing facility in Odisha

A leading FMCG player has laid the foundation for its first manufacturing facility in Eastern India with an investment of Rs.900 crores in Khordha, Odisha. This move marks a key step in expanding its footprint and supporting the “Make in India” initiative, with the plant set to produce items from the company’s food portfolio.

Price Variation

During Friday’s trading session, shares of Nestle India Ltd reached an intra-day high of Rs.2,265.00 each, rising 0.86 percent from the previous closing price of Rs.2,245.65 per share. However, the shares retreated slightly and are trading at Rs.2,260.95 apiece. 

Domestic Expansion

Nestlé India Limited announced the start of construction for its tenth manufacturing facility and first in Eastern India, located in Khordha, Odisha. The groundbreaking ceremony, attended by Odisha Chief Minister Mohan Charan Majhi, marks a major step in the company’s growth journey and its commitment to the “Make in India” initiative.  

With an initial investment of around Rs.900 crores in the first phase, the Khordha factory will focus on producing a range of food products from Nestlé India’s portfolio, including ready-to-cook dishes and cooking aids. This new plant is expected to strengthen Nestlé’s manufacturing footprint in India, create local employment opportunities, and improve supply chain efficiency in the eastern region.

Management Commentary

Shri Suresh Narayanan, Chairman and Managing Director of Nestlé India, shared his thoughts, stating, “With a steadfast adherence to ‘Make in India’ we had announced our tenth factory in Odisha, reaffirming the significance of India as a market. It gives me immense pleasure as we witness our planning and efforts bearing fruit. We are confident that this upcoming factory will not only help us with our business but will also stand tall as a vibrant example of gender diversity, sustainable manufacturing, paperless, digitally managed facility with an abiding focus on the environment.”

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Domestic Network

Nestlé India currently operates manufacturing facilities in several locations, including Moga (Punjab), Choladi (Tamil Nadu), Nanjangud (Karnataka), Samalkha (Haryana), Ponda and Bicholim (Goa), Pantnagar (Uttarakhand), Tahliwal (Himachal Pradesh), and Sanand (Gujarat). The new factory in Khordha highlights the company’s continued efforts to broaden its presence and better serve consumers across the country.

Earnings Report

For the quarter ending December 2024, Nestle India reported revenue from operations of Rs.4,780 crore, reflecting a 4 percent increase compared to Rs.4,600 crore in the same quarter of the previous year. Similarly, Profit After Tax (PAT) increased by 6.1 percent, reaching Rs.696 crore, up from Rs.656 crore in the corresponding period of the previous year. 

Ratio Analysis

The company has a Return on Capital Employed (ROCE) of 29.26 percent and a Return on Equity (ROE) of 21.24 percent. Its Price-to-Earnings (P/E) ratio stands at 68.91, higher than the industry average of 49.66. Furthermore, the company maintains a current ratio of 0.77, a debt-to-equity ratio of 0.09, and an Earnings Per Share (EPS) of Rs.32.61. 

Business Overview

Nestle India, a subsidiary of Nestle S.A., has established a prominent presence in the Indian market over the past century. With a commitment to improving the lives of consumers, Nestle India offers a wide array of products, particularly well-known brands such as Maggi, Nescafe, KitKat, and Milkmaid. The company places a strong focus on nutrition, health, and wellness, aiming to provide consumers with products that promote a healthier lifestyle. 

Written by – Siddesh S Raskar

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