Further, the ongoing pandemic continued to boost its online sales. In the quarter, sales from e-commerce channels grew by 66 percent year-on-year and contributed an unprecedented 3.8 per cent towards its domestic sales.
Growing cost of key materials, however, is emerging as a potential challenge, said Narayanan. “While the Nestlé India family has learnt to cope with the operating volatility in the pandemic, recent sharp escalations in key raw material prices poses challenges that we will resolutely respond to, while maintaining the integrity of our business model”.
While the share of raw material costs in its total sales fell during January-March, over the same quarter previous year, during the latter parts of the quarter, Nestle witnessed headwinds in terms of rising cost of packaging materials and commodities. Since a part of its raw materials are booked or purchased in advance, the benefits of the lower cost of raw materials in the quarter may not reflect the situation on-ground and may have a larger impact on its margins in coming quarters, said analysts.
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