66-Year-Old FMCG Giant, to Consider Bonus Issue on 26 June After 29 Years
The stock has given 6.83 per cent on a YTD basis, and in the last 12 months the stock declined by 9 per cent.
Nestlé India Limited has announced that a meeting of its Board of Directors is scheduled to be held on Thursday, 26 June 2025, to consider and approve a proposal for the issue of bonus shares, subject to necessary approvals. This development follows its strong operational and financial performance in recent years and could be a positive signal for investors tracking Large-Cap consumer stocks. This is a 66-year-old company considering a bonus issue after 28 years.
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Having operated in India for over 113 years, Nestlé India employs more than 8,700 individuals. The company has significantly expanded its shareholder base, growing from 1.7 lakh shareholders to over 5.47 lakh following a recent stock split. Its commitment to society is also evident, having impacted nearly 14 million beneficiaries through various community and sustainability initiatives.
Between 2015 and FY 2023-24, the company’s turnover rose by 134 per cent, recording a compound annual growth rate (CAGR) of 11.2 per cent. Profit from operations grew at a CAGR of 15.1 per cent, while its market capitalisation surged by 273 per cent. Compared to its peer group’s average organic growth of 10.5 per cent, Nestlé India achieved 11.2 per cent, reinforcing its position as a resilient player in the FMCG space.
The company’s strategy focuses on penetration-led volume growth, targeting increased household penetration across India. It plans to expand its retail footprint from 5.3 million outlets to 6 million. A capital investment of approximately Rs 5,800 crore between 2020 and 2025 underscores its growth ambitions, which includes setting up a 10th factory in Odisha.
Despite challenges in the milk and nutrition category, driven by rising inflation and stiff competition from cooperatives, Nestlé continues to maintain its margin profile. Price hikes in commodities like coffee (up 75 per cent) and cocoa (up 40–50 per cent) have added cost pressures, but strategic pricing and premiumization have helped manage profitability.
On the innovation front, the company has launched over 150 products in the last nine years. It aims to grow the contribution of new products to total sales from 6.5 per cent to 10 per cent. The focus on premium products, projected to be a Rs 7,500 crore market opportunity, aligns with rising consumer aspirations. Healthier offerings, including baby food with reduced sugar, are part of its broader portfolio diversification.
Management remains optimistic about long-term growth and is maintaining a cautious yet focused approach toward core categories. While continuing to prioritize shareholder value, the company is open to exploring new segments and potential inorganic growth avenues in the coming years.
The upcoming board meeting on the bonus issue is being closely watched. Such corporate actions, along with robust Quarterly Results and sustained profitability, often reflect a company’s confidence in its future earnings potential.
Disclaimer: The article is for informational purposes only and not investment advice.