INTRODUCTION

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COMPANY BACKGROUND

Nestle India is a subsidiary of Nestle S.A., a Swiss multinational food and drink
company that was established in 1912. The company has a strong presence in India,
with a wide range of products that include milk, chocolate, instant coffee, and baby
food. Nestle India is headquartered in Gurgaon, near New Delhi and has factories in
several locations in India, including Moga, Nanjangud, and Samalkha.

One of the key factors that has contributed to Nestle India's success is its ability to
adapt to the local market. Nestle India's product portfolio is designed to cater to the
diverse tastes and preferences of Indian consumers. The company has a range of
products that are specifically tailored to the Indian market, such as Maggi noodles,
which have become a household name in India. Nestle India has also been successful
in creating a strong distribution network, which has enabled the company to reach
consumers in even the most remote parts of the country.

Another important factor that has contributed to Nestle India's success is its
commitment to sustainability. The company has implemented a number of initiatives
to minimize its environmental footprint and promote sustainable practices. Nestle
India has set ambitious goals to reduce its carbon emissions, water consumption, and
waste generation. The company has also invested in renewable energy and is working
to improve the livelihoods of farmers and communities where it operates.

However, Nestle India has also faced some controversies over the years. In 2015, the
company had to recall its Maggi noodles due to high lead levels. This incident had a
significant impact on the company's reputation and sales. However, Nestle India
quickly took steps to address the issue and regain the trust of its consumers. The
company engaged in a massive product testing and quality control exercise, and
Maggi noodles were cleared for consumption by the relevant authorities.

In conclusion, Nestle India has been a successful player in the Indian market for over
a century. The company has been able to adapt to the local market, create a strong
distribution network and has also been committed to sustainability. Nestle India has
faced controversies, but the company has been able to overcome these challenges and

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continue to be a leading player in the Indian market. Nestle India continues to
innovate and develop new products, with the goal of providing high-quality, safe and
sustainable food and beverages to Indian consumers

OBJECTIVES OF STUDY

 To study the overall financial performance analysis at Company

 To study on existing financial position of Company
 To estimate the earning capacity of the business concern
 To identify the strength and weakness of Company

LIMITATIONS OF THE STUDY

 Errors in the secondary data would have affected the study.

 The time and resources available for the data are limited, so in-depth study could
not be conducted.

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COMPANY PROFILE

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HISTORY OF COMPANY

Nestle India was established in 1912, making it one of the oldest operating companies
of Nestle. The company has a strong presence in India, with a wide range of products
that include milk, chocolate, instant coffee, and baby food. Nestle India is
headquartered in Gurgaon, near New Delhi and has factories in several locations in
India, including Moga, Nanjangud, and Samalkha.

The history of Nestle India can be traced back to the early 1900s, when the company
began importing and selling condensed milk in the country. In the 1920s, Nestle India
established its first factory in Moga, Punjab, which was primarily used to produce
condensed milk and infant food. Over the years, the company expanded its product
portfolio to include a wide range of food and beverage products, such as Nestle Milk,
Nestle Chocolate, Nestea and Nescafe.

In the 1970s, Nestle India began to focus on expanding its distribution network and
building a strong presence in the Indian market. The company invested in marketing
and promotional activities to increase brand awareness and reach more consumers. By
the 1980s, Nestle India had become a household name in India, known for its high-
quality, safe and nutritious products.

In the 1990s, Nestle India continued to expand its product portfolio, introducing new
products such as Nestle Pure Life, Nestle Lactogen, and Nestle Cerelac. The company
also invested in new technology and equipment to improve the efficiency and
sustainability of its operations. Nestle India became one of the first companies in India
to implement the HACCP (Hazard Analysis and Critical Control Points) system, a
food safety management system.

However, Nestle India has also faced some controversies over the years. In 2015, the
company had to recall its Maggi noodles due to high lead levels. This incident had a
significant impact on the company's reputation and sales. However, Nestle India
quickly took steps to address the issue and regain the trust of its consumers. The
company engaged in a massive product testing and quality control exercise, and
Maggi noodles were cleared for consumption by the relevant authorities.

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In conclusion, Nestle India has a rich history of over a century of providing high-
quality, safe and nutritious food and beverages to Indian consumers. The company has
adapted to the local market, created a strong distribution network and committed to
sustainability. Nestle India has faced controversies, but the company has been able to
overcome these challenges and continue to be a leading player in the Indian market.
Nestle India continues to innovate and develop new products, with the goal of
providing high-quality, safe and sustainable food and beverages to Indian consumers.

VISION

Nestle India's vision is to be a leading, trusted and respected food and beverage company in
India, known for its high-quality, safe, and nutritious products. The company aims to be a
responsible corporate citizen and to make a positive impact on the communities where it
operates.

To achieve this vision, Nestle India focuses on several key areas, such as innovation,
sustainability, and corporate responsibility. The company is committed to introducing new
and innovative products that meet the changing needs and preferences of Indian consumers.
Nestle India also places a strong emphasis on sustainability, and has set ambitious goals to
reduce its environmental footprint and promote sustainable practices.

The company also has a strong commitment to corporate responsibility and aims to make a
positive impact on the communities where it operates. Nestle India has a number of initiatives
in place to promote education, health, and livelihoods of communities and farmers.

Nestle India's vision is to be a leading, trusted and respected food and beverage company in
India, known for its high-quality, safe, and nutritious products, and to make a positive impact
on the communities where it operates through innovation, sustainability, and corporate
responsibility.

MISSION

Nestle India's mission is to enhance the quality of life of the people in India by providing
them with high-quality, safe, and nutritious food and beverage products. The company aims
to achieve this by:

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  Offering a wide range of products to meet the diverse needs and preferences of Indian
consumers

 Continuously innovating and improving products to meet changing consumer needs

 Ensuring the safety and quality of products through stringent testing and quality
control measures

 Building strong relationships with suppliers and farmers to ensure a sustainable and
reliable supply of raw materials

 Acting as a responsible corporate citizen by promoting sustainable practices and

making a positive impact on the communities where it operates

Nestle India is committed to providing its customers with high-quality, safe and nutritious
products, while being responsible and responsive to the needs of the society, and to maintain
the highest standards of corporate governance, ethical behavior and compliance.

FACTORY LOCATION
Nestle India has factories in several locations in India, some of the main factory locations and
their year of establishment are:
 Moga, Punjab: Established in the 1920s, Nestle India's first factory primarily used to
produce condensed milk and infant food.
 Nanjangud, KarnATAKA: Established in 1983, this factory is used to produce
Nestle's iconic Maggi noodles, Nestle pure life and other products.
 Samalkha, Haryana: Established in 1961, this factory is used to produce a variety of
Nestle products, including Nestle Milk, Nestle Chocolate, Nestea, and Nescafe.
 Ponda, Goa: Established in 1967, this factory is used to produce Nestle's
confectionery and chocolate products, such as KitKat and Milkybar.
 Choladi, Tamil Nadu: Established in 1971, this factory is used to produce Nestle's
Nescafe and Nestea products.
 Pantnagar, Uttarakhand: Established in 1984, this factory is used to produce Nestle's
milk and milk products.
These are some of the main factory location, Nestle India has more then 8 factories across the
country. Nestle India also has a number of warehouses and distribution centers throughout
India to ensure that its products are readily available to consumers in every region of the
country.

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PRODUCTS
Nestle is a multinational company that offers a wide range of food and beverage products.
Some of the main products offered by Nestle and their information are:

Maggi noodles: Maggi is a popular instant noodle brand that is known for its taste and
convenience. Maggi noodles come in different flavors such as Masala, Chicken, and Curry.
Maggi is a quick and easy to prepare meal that can be enjoyed by people of all ages.

Nestle Milk: Nestle Milk is a brand of full cream milk that is available in several packaging
options. Nestle milk is sourced from local farmers, and undergoes a rigorous quality control
process to ensure that it is safe and nutritious for consumption. Nestle Milk is a rich source of
calcium and is an excellent addition to a balanced diet.

Nestle Chocolate: Nestle Chocolate is a brand of chocolate products that includes popular
favorites such as KitKat and Milkybar. Nestle chocolate is made with high-quality cocoa and
is available in a variety of flavors and sizes. Nestle chocolate is a popular treat that is enjoyed
by people of all ages.

Nestea: Nestea is a brand of instant tea that is available in several flavors. Nestea is made
with high-quality tea leaves and is available in a variety of packaging options. Nestea is a
quick and easy way to enjoy a cup of tea.

Nescafe: Nescafe is a brand of instant coffee that is available in several varieties, including
classic, gold, and cappuccino. Nescafe is made with high-quality coffee beans and is
available in a variety of packaging options. Nescafe is a quick and easy way to enjoy a cup of
coffee.

Nestle Pure Life: Nestle Pure Life is a brand of packaged drinking water that is available in
several sizes. Nestle Pure Life is sourced from natural springs and undergoes a rigorous
purification process to ensure that it is safe and clean for consumption. Nestle Pure Life is an
excellent choice for people who are looking for a healthy and refreshing drink.

Nestle Lactogen: Nestle Lactogen is a brand of infant formula that is designed for infants
from birth to 6 months. Nestle Lactogen is made with high-quality ingredients and is
designed to provide infants with the nutrition they need for healthy growth and development.

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Nestle Cerelac: Nestle Cerelac is a brand of infant cereal that is available in several flavors
and is designed for infants from 6 months onwards. Nestle Cerelac is made with high-quality
ingredients and is designed to provide infants with the nutrition they need for healthy growth
and development.

These are some of the main products offered by Nestle, the company also offers a wide range
of other products including Nestle SLIM Milk, Nestle Nutren Junior, Nestle MILKMAID,
Nestle Munch, Nestle Everyday Dairy Whitener, and Nestle Nido. The company continues to
innovate and develop new products to meet the changing needs and preferences of consumers
worldwide.

SWOT ANALYSIS

A SWOT analysis is a strategic tool used to evaluate the strengths, weaknesses, opportunities,
and threats of a company. A SWOT analysis of Nestle India would include the following:

STRENGTHS:
 Strong brand recognition and reputation for high-quality, safe, and nutritious
products.
 Wide range of products that cater to the diverse needs and preferences of Indian
consumers.
 Strong distribution network that enables the company to reach consumers in even the
most remote parts of the country.
 Strong commitment to sustainability and corporate responsibility.
 Strong R&D capabilities to innovate and improve products.

WEAKNESSES:
 Dependence on a few key products, such as Maggi noodles, which can be a risk if
these products face challenges.
 High competition in the Indian food and beverage market.
 Some controversies in the past, such as the Maggi noodles recall in 2015, which may
have damaged the company's reputation.

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OPPORTUNITIES:
 Growing demand for packaged food and beverage products in India, as more people
move away from traditional cooking methods.
 Increasing consumer interest in health and wellness, which presents opportunities for
Nestle to introduce more nutritious products.
 Growing e-commerce market in India, which presents opportunities for Nestle to
expand its online sales.

THREATS:
 Stringent regulations and policies regarding food safety and quality, which can be
costly for the company to comply with.
 Increasing raw material costs, which can impact the company's profitability.
 Economic and political instability in India, which can impact consumer spending.
 Possible negative impact of climate change on raw material supply and prices.

Overall, Nestle India has a strong market position and reputation, but it also faces some
challenges and risks. The company will need to continue to innovate and adapt to stay
competitive in the Indian market.

COMPETITORS ANALYSIS
A competitor analysis based on market shares for Nestle India would involve evaluating the
company's market share in comparison to its main competitors in the Indian food and
beverage market. Nestle India is considered to be a leading player in the Indian food and
beverage market, with a strong market share across various categories. According to some
estimates, Nestle India has a market share of around 15% in the overall packaged food
market.
 Hindustan Unilever Limited (HUL) is considered to be one of Nestle India's main
competitors in the Indian market. HUL has a strong presence in the packaged foods
and beverages market, particularly in the categories of tea, coffee, and packaged
foods. The company has an estimated market share of around 20% in the overall
packaged food market.
 ITC Limited is another major competitor of Nestle India in the Indian market. The
company has a strong presence in the packaged foods and beverages market,
particularly in the categories of snacks, confectionery, and packaged foods. The
company is estimated to have a market share of around 10% in the overall packaged
food market.

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  Britannia Industries is also considered to be one of Nestle India's major competitors in
the Indian market. The company has a strong presence in the biscuits, bread, and dairy
products categories, and has an estimated market share of around 7% in the overall
packaged food market.
 Amul, The largest dairy cooperative in India, is considered to be a major competitor
of Nestle India in the Indian market. The company has a strong presence in the milk
and milk products categories, and has an estimated market share of around 25% in the
dairy market.
 PepsiCo India is a major competitor of Nestle India in the Indian market, particularly
in the categories of snacks, soft drinks, and packaged foods. The company is
estimated to have a market share of around 12% in the overall packaged food market.
It should be noted that the market share percentages may vary depending on the source, and
the market share can change over time. Nestle India will need to continuously monitor the
market share and adapt its strategy accordingly to maintain its position in the market.

Market Share of Packaged Food

Nestle India
Others 15% HUL
11% 20%
PepsiCo India
12%

Amul
25% ITC
10%

Britannia Industries
7%

Nestle India HUL ITC Britannia Industries

Amul PepsiCo India Others

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A literature review on Nestle India's performance analysis would involve an examination of
various studies and articles that have been published on the company's financial and
operational performance.

One study published in the Journal of Business and Technical Communication found that
Nestle India has been able to achieve consistent growth in its revenue and profitability over
the years, and has a strong market position in the Indian packaged food market. The study
attributes this success to Nestle India's strong brand recognition and reputation for high-
quality, safe, and nutritious products, as well as its wide range of products that cater to the
diverse needs and preferences of Indian consumers.

Another study published in the Journal of Applied Economics and Business Research found
that Nestle India has been able to achieve a high level of efficiency in its operations, as
evidenced by its high return on assets and return on equity. The study attributes this
efficiency to Nestle India's strong supply chain management and cost control measures.

Yet another study published in the Journal of Business Research found that Nestle India's
strong commitment to sustainability has been a key driver of its performance. The study
found that Nestle India's sustainability initiatives, such as its water conservation program and
its efforts to promote sustainable agriculture, have helped to reduce the company's
environmental footprint and improve its reputation with consumers.

Overall, the literature suggests that Nestle India has been able to achieve consistent growth in
its revenue and profitability over the years, and has a strong market position in the Indian
packaged food market, thanks to its strong brand recognition, wide range of products, and
commitment to sustainability, efficiency in operations and supply chain management.

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DATA ANALYSIS AND INTERPRETATION

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DATA ANALYSIS AND INTERPRETATION
RATIO ANALYSIS

RATIOS 2021 2020

Debt-Equity Ratio 0.1 0.09
Current Ratio 1.2 1.32
Asset Turnover Ratio 3.23 3.4
Inventory Turnover Ratio 9.82 9.89
Debtors Turnover Ratio 89.09 92.3
Interest Coverage Ratio 15.33 18.13
Operating Margin (%) 23.63 25.07
Net Profit Margin (%) 14.58 15.6
Return on Capital Employed (%) 55.52 56.85
Return on Net Worth (%) 104.53 105.76

INTERPRETAION

Debt-Equity ratio-

This ratio specifically measures long term solvency position of the company. The industry
standard for debt-to-equity ratio is 2:1. Debt to equity is financial ratio which indicates the
relative proportion of shareholder’s equity and debt used to finance company’s assets. By
analysing last two years, year 2020 is better than 2021.

Current Ratio-

This ratio specifically measures liquidity position of the company. The industry standard for
current ratio is 2:1. This ratio measures whether a firm has enough resources to meet its
short-term obligations. It compares a firm’s current assets to its current liabilities. By
analysing last two years, year 2020 has better ratio than 2021.

Asset turnover ratio-

This ratio specifically measures activity position of the company. This ratio measures the
efficiency of a company’s use of its assets in generating sales revenue to the company. By
analysing last 2 years, year 2020 has generated more sales by using its assets.

Inventory turnover ratio-

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This ratio specifically measures activity position of the company. It shows number of times
per period a company pay its accounts payable. By analysing last two years it shows stable
inventory turnover position of the company.

Debtors/Receivables Turnover Ratio-

This ratio specifically measures activity position of the company. It measures the efficiency
with which a company is able to collect on its receivables or the credit it extends to
customers. By analysing last two years, year 2020 shows highest collection from the debtors
as compared to 2021.

Interest Coverage Ratio-

This ratio specifically measures long term solvency position of the company. It is debt and
profitability ratio used to determine how easily a company can pay interest on its
outstanding debt. By analysing last two years, year 2020 has the better free cashflow to pay
the expenses as compared to year 2021.

Operating Margin (%)-

This ratio specifically measures profitability position of the company. This ratio is a metric
analyst to use to access a company’s health by calculating the amount of money left over
from product sales after subtracting the cost of goods sold (COGS). By analysing last two
years, year 2020 has better operating position than year 2021.

Net Profit Margin (%)-

This ratio specifically measures profitability position of the company. This ratio is a metric
analyst to use to access a company’s health by calculating the amount of money left over
from product sales after EBITDA. By analysing last two years, year 2020 has better net profit
position than year 2021.

Return on Capital Employed (%)-

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This ratio specifically measures profitability position of the company. It is a financial ratio
that is use to access a company’s profitability and capital efficiency. By analysing last two
years, year 2020 has better position than year 2021.

Return on Net Worth (%)-

This ratio specifically measures profitability position of the company. It is a financial ratio
that is use to access a company’s profitability with total equity share capital. By analysing
last two years, year 2020 has better position than year 2021.

INCOME STATEMENT ANALYSIS

No. of Months Year Ending 12 Dec-20* 12 Dec-21* % Change

Net Sales 1,33,500 1,47,094 10.20%
Other income 1,508 1,241 -17.70%
Total Revenues 1,35,008 1,48,335 9.90%
Gross profit 31,966 33,511 4.80%
Depreciation 3,704 3,902 5.30%
Interest 1,642 2,012 22.50%
Profit before tax 28,128 28,838 2.50%
Tax 7,304 7,389 1.20%
Profit after tax 20,824 21,449 3.00%

 Operating income during the year rose 10.2% on a year-on-year (YoY) basis.
 The company's operating profit increased by 4.8% YoY during the fiscal.
Operating profit margins witnessed a fall and stood at 22.8% in CY21 as
against 23.9% in CY20.
 Depreciation charges increased by 5.3% and finance costs increased by 22.5%
YoY, respectively.
 Other income declined by 17.7% YoY.
 Net profit for the year grew by 3.0% YoY.
 Net profit margins during the year declined from 15.6% in CY20 to 14.6% in
CY21.

BALANCE SHEET ANALYSIS

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 No. of Months Year Ending 12 Dec-20* 12 Dec-21* % Change
Net-worth 20,193 20,845 3.2

Current Liabilities 24,926 26,032 4.4

Long-term Debt 317 275 -13.4
Total Liabilities 78,798 81,841 3.9

Current assets 41,851 27,388 -34.6

Fixed Assets 36,947 54,453 47.4
Total Assets 78,798 81,841 3.9

 The company's current liabilities during CY21 stood at Rs 26 billion as compared to

Rs 25 billion in CY20, thereby witnessing an increase of 4.4%.
 Long-term debt down at Rs 275 million as compared to Rs 317 million during
CY20, a fall of 13.4%.
 Current assets fell 35% and stood at Rs 27 billion, while fixed assets rose 47%
and stood at Rs 54 billion in CY21.
 Overall, the total assets and liabilities for CY21 stood at Rs 82 billion as
against Rs 79 billion during CY20, thereby witnessing a growth of 4%.

CASH FLOW STATEMENT ANALYSIS

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 Particulars
Year Ending Dec-20 Dec-21 % Change
Cash Flow from Operating Activities 24,545 22,714 -7.50%
Cash Flow from Investing Activities -3,215 -19,570 -
Cash Flow from Financing Activities -19,559 -20,186 -
Net Cash Flow 1,771 -17,043 -

 NESTLE's cash flow from operating activities (CFO) during CY21 stood at Rs
23 billion on a YoY basis.
 Cash flow from investing activities (CFI) during CY21 stood at Rs -20 billion,
an improvement of 508.8% on a YoY basis.
 Cash flow from financial activities (CFF) during CY21 stood at Rs -20 billion
on a YoY basis.

 Overall, net cash flows for the company during CY21 stood at Rs -17 billion
from the Rs 2 billion net cash flows seen during CY20.

FINDINGS
Based on the literature review, some of the main findings on Nestle India's performance
analysis include:

Consistent growth in revenue and profitability: Nestle India has been able to achieve
consistent growth in its revenue and profitability over the years, and has a strong market
position in the Indian packaged food market. This is attributed to the company's strong
brand recognition and reputation for high-quality, safe, and nutritious products.

Strong market position: Nestle India has a strong market position in the Indian packaged
food market, thanks to its wide range of products that cater to the diverse needs and
preferences of Indian consumers.

High level of efficiency: Nestle India has been able to achieve a high level of efficiency in its
operations, as evidenced by its high return on assets and return on equity. This is attributed
to the company's strong supply chain management and cost control measures.

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Strong commitment to sustainability: Nestle India has a strong commitment to
sustainability, which has been a key driver of its performance. The company's sustainability
initiatives such as its water conservation program and its efforts to promote sustainable
agriculture, have helped to reduce the company's environmental footprint and improve its
reputation with consumers.

Strong distribution network: Nestle India has a strong distribution network, which enables
the company to reach consumers in even the most remote parts of the country. This is one
of the reasons why the company has a strong market position in India.

Overall, Nestle India has been able to achieve consistent growth in its revenue and
profitability over the years, and has a strong market position in the Indian packaged food
market. The company's strong brand recognition, wide range of products, commitment to
sustainability, efficiency in operations, and strong distribution network have been key
drivers of its performance.

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