NESTLEIND

Rewrites throughout, updates stock moves

By Kashish Tandon and Chandini Monnappa

Aug 18 (Reuters) - Indian auto and consumer stocks rallied on Monday, with the auto index .NIFTYAUTO jumping nearly 5% to a 10-month high after the government's plans of sweeping tax cuts, including lower goods and services tax (GST) on small cars.

The government's plan to lower GST on small cars to 18% from 28%, among other changes, as part of tax reforms unveiled by Prime Minister Narendra Modi on Friday, is expected to spur demand and boost consumer spending.

The plans are likely to be announced by Diwali, a major, five-day Hindu festival in October and India's biggest shopping season as households traditionally splurge, leading to the country's consumption cycle peaking around the festival.

"These are strong tailwinds for the market with potential to take it higher," said VK Vijayakumar, chief investment strategist at Geojit Investments, calling the timing of the next major GST reforms a "big positive".

"Sectors like autos and cement, which are presently in the 28% tax slabs, are expected to benefit," he said.

Urban consumers have been tightening their belts in recent quarters, squeezed by high living costs and sluggish income growth. A cut in GST on small cars, the auto-market's most price-sensitive segment, could fire up festive season demand, giving middle-class buyers a break.

Auto stocks .NIFTYAUTO led sectoral gains on the Nifty 50 .NSEI index, and were set for their best day since June 5, 2024.

Maruti Suzuki MRTI.NS and Hyundai Motor India HYUN.NS jumped 8% and 9%, respectively, to a record high.

Additionally, the simpler two-rate structure - slabs of 5% and 18%, with the 12% and 28% slabs scrapped - would make a host of products cheaper, from butter and fruit juices to dry fruits, offering a lift to consumer goods firms and shoppers.

Consumption stocks such as Hindustan Unilever HLL.NS, Nestle India NEST.NS and Dabur DABU.NS gained between 4% and 7%, powering the FMCG index .NIFTYFMCG 1.8% higher.

(Reporting by Kashish Tandon and Bharath Rajeswaran in Bengaluru; Editing by Mrigank Dhaniwala and Janane Venkatraman)

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By Aditya Kalra

NEW DELHI, Aug 11 (Reuters) - From McDonald's and Coca-Cola to Amazon and Apple, U.S.-based multinationals are facing calls for a boycott in India as business executives and Prime Minister Narendra Modi's supporters stoke anti-American sentiment to protest against U.S. tariffs.

India, the world's most populous nation, is a key market for American brands that have rapidly expanded to target a growing base of affluent consumers, many of whom remain infatuated with international labels seen as symbols of moving up in life.

India, for example, is the biggest market by users for Meta's WhatsApp and Domino's has more restaurants than any other brand in the country. Beverages like Pepsi and Coca-Cola often dominate store shelves, and people still queue up when a new Apple store opens or a Starbucks cafe doles out discounts.

Although there was no immediate indication of sales being hit, there's a growing chorus both on social media and offline to buy local and ditch American products after Donald Trump imposed a 50% tariff on goods from India, rattling exporters and damaging ties between New Delhi and Washington.

McDonald's, Coca-Cola, Amazon and Apple did not immediately respond to Reuters queries.

Manish Chowdhary, co-founder of India's Wow Skin Science, took to LinkedIn with a video message urging support for farmers and startups to make "Made in India" a "global obsession," and to learn from South Korea whose food and beauty products are famous worldwide.

"We have lined up for products from thousands of miles away. We have proudly spent on brands that we don't own, while our own makers fight for attention in their own country," he said.

Rahm Shastry, CEO of India's DriveU, which provides a car driver on call service, wrote on LinkedIn: "India should have its own home-grown Twitter/Google/YouTube/WhatsApp/FB -- like China has."

To be fair, Indian retail companies give foreign brands like Starbucks stiff competition in the domestic market, but going global has been a challenge.

Indian IT services firms, however, have become deeply entrenched in the global economy, with the likes of TCS TCS.NS and Infosys INFY.NS providing software solutions to clients world over.

On Sunday, Modi made a "special appeal" for becoming self-reliant, telling a gathering in Bengaluru that Indian technology companies made products for the world but "now is the time for us to give more priority to India's needs."

He did not name any company.

DON'T DRAG MY MCPUFF INTO IT

Even as anti-American protests simmer, Tesla TSLA.O launched its second showroom in India in New Delhi, with Monday's opening attended by Indian commerce ministry officials and U.S. embassy officials.

The Swadeshi Jagran Manch group, which is linked to Modi's Bharatiya Janata Party, took out small public rallies across India on Sunday, urging people to boycott American brands.

"People are now looking at Indian products. It will take some time to fructify," Ashwani Mahajan, the group's co-convenor, told Reuters. "This is a call for nationalism, patriotism."

He also shared with Reuters a table his group is circulating on WhatsApp, listing Indian brands of bath soaps, toothpaste and cold drinks that people could choose over foreign ones.

On social media, one of the group's campaigns is a graphic titled "Boycott foreign food chains", with logos of McDonald's MCD.N and many other restaurant brands.

In Uttar Pradesh, Rajat Gupta, 37, who was dining at a McDonald’s in Lucknow on Monday, said he wasn’t concerned about the tariff protests and simply enjoyed the 49-rupee ($0.55) coffee he considered good value for money.

"Tariffs are a matter of diplomacy and my McPuff, coffee should not be dragged into it," he said.

(Reporting by Aditya Kalra; Additional reporting by Saurabh Sharma, Praveen Paramasivam and Aditi Shah)

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Aug 5 (Reuters) - Indian biscuit maker Britannia Industries BRIT.NS reported first-quarter profit below estimates on Tuesday.

The company, which sells 'Marie Gold' and 'Bourbon' biscuits, reported consolidated net profit of 5.21 billion rupees ($59.3 million).

Analysts, on average, had expected 5.7 billion rupees, as per data compiled by LSEG.

($1 = 87.8470 Indian rupees)

(Reporting by Ananta Agarwal in Bengaluru; Editing by Janane Venkatraman)

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July 31 (Reuters) - Nestle India Ltd NEST.NS:

• NESTLE INDIA LTD - SURESH NARAYANA TO RETIRE AS CHAIRMAN AND MD OF NESTLÉ INDIA

Source text: ID:nBSE5bkznG

Further company coverage: NEST.NS

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** Nestle India NEST.NS falls more than 2% to hit a near 4-month low of 2,270 rupees

** Down for second straight session after posting a drop in Q1 profit

** "Past price hikes driven by broad-based inflation have weighed on performance amid demand stress," says Emkay Global Financial Services, which retained "reduce" rating on stock

** UBS lowers PT to 2,500 rupees from 2,650 rupees earlier, says earnings growth outlook remains lacklustre

** Analysts on avg recommend "hold" rating on stock; median PT 2,410 rupees, as per LSEG data

** YTD, NEST up 4.6%

(Reporting by Vivek Kumar M)

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** "Maggi" noodles maker Nestle India NEST.NS up 0.2% at 2,456.7 rupees ahead of quarterly results due later in the day

** Analysts at Jefferies expect company to post higher revenue growth on the back of strong volume and price hikes but see gross margins contracting due to continued inflation in coffee, cocoa and milk costs

** Higher input costs are likely to weigh on margins, with the firm expected to report a contraction in profitability - Elara Capital analysts say

** Peer Tata Consumer's TACN.NS quarterly earnings were hit by tea, coffee cost inflation; Hindustan Unilever HLL.NS is yet to report quarterly results

** NEST rated "hold" on avg, HLL, TACN rated "buy" - data compiled by LSEG

** NEST up ~14% vs 6.4% rise in benchmark Nifty 50 index .NSEI

(Reporting by Manvi Pant in Bengaluru)

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July 4 (Reuters) - Nestle India Ltd NEST.NS:

• NESTLE INDIA LTD - NESTLÉ INDIA APPROVES BONUS EQUITY SHARES IN 1:1 RATIO

Source text: ID:nNSEbFlyw5

Further company coverage: NEST.NS

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July 2 (Reuters) - Nestle India Ltd NEST.NS:

• NESTLE INDIA LTD - ADDS NEW MAGGI NOODLES PRODUCTION LINE

• NESTLE INDIA LTD - INVESTMENT REQUIRED FOR CAPACITY ADDITION 1.05 BILLION RUPEES

• NESTLE INDIA LTD - CAPACITY ADDITION FINANCED THROUGH INTERNAL ACCRUALS

Source text: ID:nBSE8TN1tS

Further company coverage: NEST.NS

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June 26 (Reuters) - Nestle India Ltd NEST.NS:

• ISSUE OF BONUS EQUITY SHARES IN THE RATIO OF 1:1

Source text: ID:nBSElMyC3

Further company coverage: NEST.NS

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** Nestle India NEST.NS climbs 2.1% to 2,368 rupees, top gainer on FMCG index .NIFTYFMCG

** "Maggi" noodles maker says it will consider issue of bonus shares in board meeting on June 26

** Co did not specify quantum of issue

** NEST among five stocks on 15-member FMCG index rated "hold"; rest rated "buy" or higher - data compiled by LSEG

** YTD - NEST up 9% vs FMCG index 4% decline

(Reporting by Kashish Tandon in Bengaluru)

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June 19 (Reuters) - Nestle India Ltd NEST.NS:

• NESTLE INDIA - BOARD TO CONSIDER AND APPROVE BONUS SHARES PROPOSAL

Source text: ID:nBSEbFjQzS

Further company coverage: NEST.NS

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** Nestle India NEST.NS down 0.4% after fourth-quarter results, pulling back from declines of 2.2%

** Co reports 5.2% drop in profit as high commodity costs put margins under pressure

** Stock was up ~1% before results

** Says prices of coffee and cocoa, key ingredients in its popular "Nescafe" drinks and "KitKat" chocolates, remained high, driving its expenses 8% higher

** Peer Hindustan Unilever HLL.NS reports fourth-quarter profit marginally below estimates; stock fell 3%

** YTD, NEST up 12% vs FMCG index's .NIFTYFMCG 0.4% climb

(Reporting by Kashish Tandon in Bengaluru)

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By Praveen Paramasivam

April 16 (Reuters) - Indian dairy firm Heritage Foods HEFI.NS will increase the prices of its products this financial year to offset rising costs such as fuel and raw material expenses, its CEO told Reuters.

Consumer goods majors, including Nestle India NEST.NS and Cinthol soapmaker Godrej Consumer Products GOCP.NS, are hiking prices to battle a double whammy of a slowdown in consumer spending and higher costs.

"The price increase will be across the board, not specifically on milk," Heritage CEO Srideep Kesavan said last week. "It will also be on paneer and other dairy products ... in line with covering our costs increase."

A one-litre pouch of Heritage toned milk is priced at 53 rupees (62 U.S. cents). The company intends to increase the price by 1 to 2 rupees, or 2%-4%, in the financial year that started on April 1.

In comparison, the prices of milk and milk products in India rose 2.6%-2.9% in the January-March quarter, still below the broader inflation rate, according to government data.

Heritage, which mainly caters to the Southern states, raised milk prices earlier this year, its first increase in nearly two years.

It also plans to expand its footprint this year to 350,000 stores from 250,000 currently, including deeper growth in existing markets such as Chennai.

PROTEIN DEFICIENCY IN INDIA

Dairy brands, from Amul to Milky Mist, have lately been highlighting the amount of protein on packages of everything from cottage cheese to curd as affluent Indians strive to meet daily protein requirements.

Surveys indicate a majority of Indians have a protein-deficiency due to a largely vegetarian diet.

But Heritage, according to Kesavan, will focus more on maintaining the taste of its products rather than reformulating its products to add more protein.

"Taste is more important than loud claims," he said.

($1 = 85.9450 Indian rupees)

(Reporting by Praveen Paramasivam in Chennai; Editing by Sonia Cheema)

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April 3 (Reuters) - Nestle India Ltd NEST.NS:

• INITIAL INVESTMENT OF 9 BILLION RUPEES FOR NEW KHORDHA FACTORY

• NEW FACTORY TO MANUFACTURE PRODUCTS FROM ITS FOODS PORTFOLIO

Source text: ID:nBSE1sFCwl

Further company coverage: NEST.NS

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** Consumer stocks Hindustan Unilever HLL.NS and Nestle India NEST.NS drop 1.5% and 2.5%, respectively, after BofA downgrade

** BofA says, "Growth recovery for HLL seems to be far slower than we had imagined earlier"; downgrades to "neutral" from "buy"

** Cuts HLL's Q4 FY25 earnings estimate by 2% and FY26-FY27 earnings estimate by 4%-5%, citing macro and inflationary volatility

** Also downgrades NEST to "underperform" from "neutral", citing subdued growth, soft demand and cost pressures

** Says general softness in consumption continues with urban India slowdown, while rural recovery has been gradual

** YTD, HLL loses 4%, while NEST gains 3% vs a 6.3% drop in consumer index .NIFTYFMCG

(Reporting by Bharath Rajeswaran in Bengaluru)

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March 26 (Reuters) - Nestle India Ltd NEST.NS:

• NESTLE INDIA LTD - GETS TAX PENALTY OF 6.9 MILLION RUPEES

Source text: ID:nBSE2swCvc

Further company coverage: NEST.NS

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March 7 (Reuters) - Nestle India NEST.NS said on Friday it received a warning from the country's markets regulator for a breach of insider trading regulations "by a designated person of the company."

The Indian arm of Swiss food giant Nestle NESN.S said its compliance officer received an administrative warning letter from the Securities and Exchange Board of India (SEBI) on Thursday. But the firm stopped short of revealing the findings of the letter or the details of the person.

The company, which makes Maggi instant noodles, said there was no material impact on its financials, operations or other activities because of the incident.

Nestle India did not immediately respond to a Reuters' request for comment.

(Reporting by Praveen Paramasivam in Chennai; Editing by Sonia Cheema)

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By Haripriya Suresh

MUMBAI, Feb 24 (Reuters) - Nestle India NEST.NS will consider raising prices of its products by a small margin to counter inflation in coffee, cocoa and edible oil while aiming to keep sales coming in, a top executive said on Monday.

Profits at Corporate India came under pressure in the October-December quarter due to the double whammy of consumers cutting back due to inflation in large cities and high prices of commodities.

"Wherever (price increase) is absolutely essential, we will have to take some pricing action," Nestle India Managing Director Suresh Narayanan told Reuters at the sidelines of an industry conference in Mumbai.

The company, which makes the Nescafe brand of instant coffee, will keep the price hikes "as low as possible," Narayanan said, adding that "price increases are not the salvation for the industry because it impacts volume growth."

India's plan to cut personal income tax rates in fiscal 2026, unveiled earlier this month, is expected to put more disposable income in the hands of the people and eventually boost consumption.

Affluent consumers in India, however, have been splurging, including on hyperfast delivery platforms such as Swiggy's SWIG.NS Instamart, Zomato's ZOMT.NS Blinkit and upstart Zepto.

While these platforms have eaten into the market share of traditional sales channels in large cities, Nayaranan pinned the chances of them maintaining their growth rate on how the models work in the longer term, given they are still making a loss.

Last month, Nestle India, the Indian arm of the eponymous Swiss consumer goods giant NESN.S, reported a smaller-than-expected quarterly profit, hit by a slowdown in consumer spending in major cities and higher product prices.

(Reporting by Haripriya Suresh in Mumbai; Writing by Praveen Paramasivam in Chennai; Editing by Janane Venkatraman)

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ZURICH/GDANSK, Feb 13 (Reuters) - Here are some of the main factors that may affect Swiss stocks on Thursday:

NESTLE NEST.NS

Nestle posted slightly better than expected full-year sales growth on Thursday as the world's biggest packaged food company raised prices for its coffees, chocolates and pet food.

CREDIT SUISSE

Bank of America BAC.N has doubled the size of its banking team in Switzerland, its CEO said, after Credit Suisse's collapse.

COMPANY STATEMENTS

* Barry Callebaut BARN.S - places dual-tranche EUR 1,750 mln bond

* DSM-Firmenich DSFIR.AS - posts full year results and sees adjusted EBITDA for 2025 at at least EUR 2.4 bln

* Idorsia LTD IDIA.S - publishes resolutions for upcoming bondholder meeting

* Santhera SANN.S - announces agreement with german GKV-SV on reimbursement amount for Agamree (Vamorolone)

* BCV BCVN.S - posts FY revenue of CHF 1.16 billion.

* Swisscom AG SCMN.S - Full-year earnings release due.

ANALYST'S VIEWS

GEBERIT AG GEBN.S - BERENBERG RAISES TO BUY FROM HOLD; RAISES TARGET PRICE TO CHF 604 FROM CHF 511

MEDACTA GROUP SA MOVE.S BERENBERG RAISES TARGET PRICE TO CHF 160 FROM CHF 150

ECONOMY

Swiss January CPI due at 0730 GMT. Seen -0.1 m/m, +0.4 y/y.

(Reporting by Zurich newsroom and Gdansk newsroom)

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By Praveen Paramasivam

Feb 1 (Reuters) - India's plans to cut personal income tax rates will put more disposable income in the hands of the people and eventually boost consumption in the world's fifth-largest economy, executives from automobile and consumer firms said on Saturday.

This comes after the government said that people earning up to 1.28 million rupees ($14,800) per year will not have to pay any taxes, raising its threshold from 700,000 rupees. It also cut tax rates for people earning above the new threshold.

Consumption in the Indian economy has been under stress in the last few quarters as shoppers tightened their purse strings amid stubborn inflation and modest wage growth.

"Tax reforms benefiting the middle class will increase disposable income, further fuelling demand across essential and aspirational categories," Aasif Malbari, CFO of Godrej Consumer Products GOCP.NS, said.

The government's announcement sent the shares of consumer goods .NIFTYFMCG, autos .NIFTYAUTO and realty <.NIFTYREAL> firms up by 1.7%-3.6% on Saturday.

"The tax cut is going to be a helpful factor in accelerating demand for various kinds of consumer products," RC Bhargava, chairman of Maruti Suzuki India MRTI.NS, told TV channel ET Now.

(Reporting by Praveen Paramasivam; Editing by Dhanya Skariachan and Sonia Cheema)

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Adds share prices in paragraph 7 and analyst comment in paragraph 8

Jan 31 (Reuters) - Nestle India NEST.NS reported a quarterly profit below market expectations on Friday, as a slowdown in consumer spending in major cities and higher product prices dampened its sales.

Consumer goods makers are struggling to sustain profits due to inflation in palm oil, coffee and cocoa, while slow wage growth and higher prices of essentials like vegetables and pulses have forced city dwellers to tighten their belts.

"It was a quarter that was marked with food inflation, moderation in urban consumption, with gradual recovery in rural consumption," Nestle India Chairman and Managing Director Suresh Narayanan said in a statement.

The Indian arm of Swiss food giant Nestle NESN.S reported a profit of 6.96 billion rupees ($80.34 million) for the third quarter, up 6.2% from a year earlier, but below market estimates of 7.31 billion rupees, according to data from LSEG.

Revenue for Nestle India, home to brands such as Nescafe instant coffee and KitKat chocolate, rose 3.9% to 47.8 billion rupees for the three-month period ended Dec. 31, primarily driven by price hikes.

Revenue jumped 8.1% in the comparable quarter last year.

Shares in Nestle India, which also declared a dividend of 14.25 rupees apiece, climbed as much as 7.7% following the results. At its current levels, up 5.5%, the stock is on course for its best day in more than four years.

The "worst is behind" for consumer goods, with the fourth quarter set to improve sequentially on past price hikes, Nuvama analyst Abneesh Roy said, citing stock gains in Tata Consumer TACN.NS and Colgate-Palmolive India after "weak results".

($1 = 86.6370 Indian rupees)

(Reporting by Praveen Paramasivam in Chennai and Kashish Tandon in Bengaluru; Editing by Sherry Jacob-Phillips)

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Refiles to add hyperlinks.

By Shritama Bose

MUMBAI, Jan 16 (Reuters Breakingviews) - If India wants to prop up its stalling economic growth, it will have to sacrifice some of the financial stability underpinning the country’s moment on the global stage.

Under Prime Minister Narendra Modi, consumption by India’s 294 million households has nearly trebled to $2.07 trillion over the past decade. It is the top engine of the $4 trillion economy and drives around 60% of GDP. Yet consumer spending is weak and has decoupled dramatically from the path of national output since the year ended March 2023, according to economists at state-owned Punjab National Bank.

Beyond the luxury market where well-heeled Indians are spending big on the high life, cracks are appearing; car sales crawled during the usually busy annual Diwali holiday in October-November. Indians are eating out less often. Starbucks SBUX.O and its partner Tata Consumer Products TACN.NS, meanwhile, are pushing the brakes on expansion; their target to hit 1,000 coffee stores by 2028 is unchanged but they are slowing the pace of new openings. Starbucks has more than 6,500 stores in China.

As it stands, India expects its GDP growth in the current year to March will hit a four-year low of 6.4%, the lower end of the pace policymakers envisioned the country sustaining for the next decade. In short, consumption is fading before it has had a real chance to flourish.

A weak jobs environment lies at the heart of the problem. The abundance of labour in the world’s most populous country is making wages crawl. It puts a perverse spin on the vaunted demographic dividend: casual and regular workers in 2023 earned an average real monthly wage roughly 1% lower than in the previous year, an International Labour Organization report based on official data shows. That’s prompted fears of a middle class shrinking instead of growing.

As a result of stagnant real incomes, middle-class Indians don't have much left over for the kind of discretionary purchases that would power a U.S.-style consumer economy.

"There used to be a middle segment, which used to be the segment that most of us fast moving consumer goods firms used to operate in, which is the middle class of the country, that seems to be shrinking," Suresh Narayanan, chair of Nestle’s India NEST.NS unit, warned in October. His peers have sounded an alarm about weak consumption in rural India for years.

The problem is worryingly broad-based. IT companies, typically the biggest private sector employers, are making fewer hires and paying less. Demand for their services like those provided by Tata Consultancy Services TCS.NS is growing slower. Automation and advances in technology including artificial intelligence are killing repetitive jobs in outsourcing and financial services, so firms are not backfilling roles when they fall vacant.

Farmers’ incomes benefited in 2024 from a strong monsoon but it’s a brief respite after two years of stagnating incomes for the 46% of the workforce depending on agriculture. Climate change is upsetting weather and food-inflation patterns: in June, rating agency Moody's tipped water stress as a sovereign credit risk to India.

The long-term answer is to create more jobs outside of agriculture. Modi’s administration is pushing manufacturing investment in the hope that factories will absorb workers and pay them better. However, the foreign direct investment required to speed progress is declining.

In the short term, New Delhi needs to act to avoid a return to a trend of weak output and consumption growth following a two-year phase of post-pandemic revenge spending. The reduced private spending is hitting growth directly and shrinking tax collections. Poor demand also means lower private investment, and that burdens the government with an even bigger role in turbocharging GDP.

Authorities could cut taxes to stimulate consumption. They are considering lower levies on personal income in the budget in February, Reuters reported in December, citing two official sources. Yet New Delhi will be hard-pressed to forego revenue without imperiling its goal to consolidate the fiscal deficit to 4.5% of GDP by March 2026.

A larger deficit could further beat down consumption if it prompts a spike in the government’s borrowing costs, triggers a lower sovereign credit rating and weakens demand for the rupee in international currency markets. That would make India’s oil import bill heftier and prompt a surge in inflation: Oil prices are already spiking following U.S. curbs on oil tankers supplying Russian crude.

Those problems could quickly compound if, as expected, Indian policymakers try to keep exports competitive by allowing the rupee to track the weakening yuan. That currency is getting battered by fears of a second trade war between China and the United States under Donald Trump’s imminent presidency.

Alternatively, the central bank could boost consumption by making it easier for individuals to tap credit. New governor, Sanjay Malhotra, will be wary of risks stemming from eye-popping growth in consumer loan books as the banking system only recently recovered from a corporate bad debt crisis. The Reserve Bank of India raised risk weights for unsecured lending in November 2023. These measures added to a chill in consumer spending – personal loans are growing at nearly half their pace a year ago. Nonetheless, the RBI expects banks’ asset quality to weaken.

The rosy narrative of strong growth and macroeconomic stability is fragile. If policymakers do intervene, they would be better off doing it sooner rather than later.

Follow @ShritamaBose on X

(Editing by Una Galani and Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on BOSE/
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Jan 15 (Reuters) - Nestle India Ltd NEST.NS:

• NESTLE INDIA LTD - GETS TAX ORDER FOR 2.3 MILLION RUPEES

Source text: ID:nBSE5dRpBm

Further company coverage: NEST.NS

(([email protected];))

Nov 21 (Reuters) - Nestle India Ltd NEST.NS:

• GOT APPELLATE AUTHORITY ORDER CONFIRMING TAX DEMAND 6 MILLION RUPEES

Source text: ID:nBSE2WmQB4

Further company coverage: NEST.NS

(([email protected];;))

By Dhwani Pandya

MUMBAI, Nov 14 (Reuters) - Indian consumer goods maker Marico MRCO.NS expects urban consumption will take at least six months to revive, its managing director told Reuters, signaling more pain for the sector from food inflation which has hit a 15-month high.

With a market cap of $9.12 billion, Marico is best known for its iconic coconut oil brand "Parachute" and edible oil brand "Saffola", and competes with the likes of Hindustan Unilever HLL.NS and Nestle NEST.NS.

India's annual inflation for food items, which account for nearly half of the consumption basket, hit a 15-month high of 10.87% in October, and retail inflation surged to a 14-month high in the same month, driven by a jump in vegetable prices and dashing hopes of an interest rate cut by the central bank next month.

"It will take a couple of quarters for urban consumption to revive. But I think once the food inflation is sorted out to a large extent, urban consumption is expected to recover," Marico Chief Executive Officer and Managing Director Saugata Gupta said in an interview in Mumbai.

"Whenever there is a food inflation, there is an impact on FMCG (fast moving consumer goods)...consumers either downgrade or titrate consumption," he added.

India's middle class, estimated to be a third of its 1.4 billion people, has been cutting spending due to higher food inflation, impacting the earnings of largest consumer goods firms.

Though consumption is mainly affected among the middle- and lower-income classes, there is not much impact on those with high incomes, Gupta said.

India has seen high luxury spending in recent months - German luxury car manufacturer Mercedes-Benz' car sales in India grew 13% in first nine months of this year, its best-everperformance, while sales of luxury apartments in country's top seven cities surged nearly 38% during that period.

Marico's international business contributes around 27% of consolidated revenue and it has a strong presence in Bangladesh, Vietnam and the Middle East, and is looking to expand operations in the United States and East Africa, as well as entering the Indonesian market, Gupta said.

In Bangladesh, where Marico has a distribution network of more than 770,000 outlets, the company's operations were briefly disrupted after violent student-led protests that led to the resignation of Prime Minister Sheikh Hasina in August.

Gupta said Bangladesh's share of Marico's international revenues dropped from 44% in the year ended March 2024 to under 40% now, and could fall further as its grows more in other geographies.

(Reporting by Dhwani Pandya; Editing by Aditya Kalra and Ros Russell)

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By Praveen Paramasivam, Shivangi Acharya

CHENNAI/NEW DELHI, Nov 13 - India's city dwellers are cutting spending on everything from cookies to fast food as persistently high inflation squeezes middle class budgets, threatening the country's brisk economic growth.

Slowing urban spending over the past three to four months has not only hurt the earnings of largest consumer goods firms, it has raised questions about the structural nature of India's long-term economic success.

Since the end of the pandemic, India's economic growth has been driven in large part by urban consumption, however, that now seems to be changing.

"There is a top end – the people with money are spending like that is going out of style," Nestle India Chairman Suresh Narayanan said.

"There used to be a middle segment, which used to be the segment that most of us fast moving consumer goods (FMCG) firms used to operate in, which is the middle class of the country, that seems to be shrinking."

Nestle India, which makes Kit Kats and other well-known goods, reported its first quarterly revenue drop since the COVID-hit June quarter in 2020.

While there is no officially defined income bracket for Indian middle class households, they are broadly estimated to account for a third of India's 1.4 billion people.

They are considered a key demographic both economically and politically, with middle class frustration seen as a significant factor behind Prime Minister Narendra Modi's weaker election performance this year.

Asia's third-largest economy is expected to expand 7.2% in the financial year ending March 2025, the fastest among its major peers.

Belying those rosy projections, however, are signs of a sharp slowdown in the household sector.

Indian urban consumption hit a two-year low this month, according to an index published by Citibank that captures indicators such as airline bookings, fuel sales and wages.

"While some of the fall could be temporary, the key macro drivers remain unfavourable," Citi's chief India economist Samiran Chakraborty said.

Growth in inflation-adjusted wage costs for listed Indian firms - a proxy for earnings of urban Indians - has remained below 2% for all the three quarters of 2024, well below the 10-year average of 4.4%, data from Citi showed.

Chakraborty cites this as a key factor impacting urban consumption, along with declining savings and tighter rules for personal loans.

Headline inflation has averaged 5% over the past 12 months, but food inflation has held above 8% as weather shocks elevated prices of vegetables, cereals and other essential foods. In October, retail inflation hit a 14-month high of 6.2% while food prices jumped to 10.9%.

Anecdotal data suggests retail sales rose close to 15% year-on-year during the 2024 festive season, which runs from August to November, Nomura said in a note last week, about half last year's pace.

"During this festival season, we have not spent at all," said Rajwanti Dahiya, 60, who survives on her husband's monthly pension of 30,000 Indian rupees ($356.76).

"Savings are low, barely there."

A 'SHRINKING' MIDDLE

India's central bank expects 7.2% GDP growth for the fiscal year ending March 2025 on the back of improved rural demand and a strong services sector.

Higher government investment could also support demand, said Rahul Bajoria, head of India and ASEAN economic research at Bank of America.

"If government spending kicks in, that probably does have some multiplier effects on private consumption spending as well," said Bajoria, who expects GDP growth at 6.8% in the current financial year.

Some are less optimistic with Citi and IDFC First Bank economists expecting GDP growth in the July-September quarter to miss the central bank's projected 7%, weighed by slower urban consumption.

That pessimism has hit consumer stocks with the Nifty FMCG index .NIFTYFMCG declining 13% since Oct. 1, compared with a 7.4% drop in the benchmark Nifty 50 .NSEI.

Of the FMCG index's 15 constituent firms, only one reported a pickup in sales volume growth in the September quarter.

Consumers in large cities are swapping branded items from hair oil to tea for cheaper unbranded alternatives, reflected in the first sales volume decline in 11 quarters for the foods and refreshment group at Hindustan Unilever.

"We see the growth in big city standing down, although in smaller cities and in rural the growth continues to be good," Hindustan Unilever chief executive Rohit Jawa said last month, after reporting lower than expected earnings.

Consumers are also cutting back on dining out.

Fast-food chains such as McDonald's, Burger King, Pizza Hut and KFC posted same-store sales declines, earnings showed.

While people are still coming, they are choosing cheaper meals, Rajeev Varman, CEO at Burger King operator Restaurant Brands Asia RESR.NS said after posting a 3% drop in quarterly same-store sales.

"We prefer budget-friendly stores that give good deals and discounts to manage our monthly expenditure," said 37-year old Avinash Crasto, a Mumbai marketing and sales executive who has a family of four and identifies as middle class.

($1 = 84.0640 Indian rupees)

(Reporting by Praveen Paramasivam in Chennai and Shivangi Acharya in New Delhi; Editing by Sam Holmes)

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India File is published every Tuesday. Think your friend or colleague should know about us? Forward this newsletter to them. They can also subscribe here.

Nov 12 - By Ira Dugal, Editor Financial News, with global Reuters staff.

Hello, I'm Ira Dugal and I head financial news for Reuters in India. Join me each Tuesday as I lead you through the biggest stories out of India, and Asia.

Indian corporations have reported weaker-than-expected earnings for the July-September quarter. Are corporate report cards signalling a slowdown in the world's fastest growing major economy? That's our focus this week.

What does Donald Trump's return to the White House mean for emerging markets? Scroll down for "Market matters".

THIS WEEK IN ASIA

** China unveils $1.4 trillion local debt package but no direct stimulus

** Putin signs into law mutual defence treaty with North Korea

** Toyota aims to ramp up China production

** Pakistan limits outdoor activities, market hours to curb air pollution-related illness

A GROWTH SPEED BUMP

Big names in Indian consumer goods, including Hindustan Unilever and Nestle India, were arguably the top disappointments during the past month's quarterly earnings season, when negative surprises and foreign investor selling drove the benchmark Nifty 50 down 6.2% for October - its steepest monthly drop in four-and-a-half years.

That wasn't just bad news for the companies' share prices. It rattled investors with a warning that India's burgeoning urban middle class - a key force driving the world's fastest growing major economy - were reining in spending on goods from soap to shampoo to biscuits and tea.

That could be a harbinger of unwelcome change for an economy accustomed to rapid growth, which reached 8.2% in the last financial year and is forecast to remain above 7% this year.

So far, analysts are seeing the slowdown at least partly as cyclical, a normal reaction after a period of strong growth, rather than as a sign of flagging demand. But they also point to inflation, seen hitting a 14-month high in October on higher food prices, as a more stubborn problem that is eroding urban spending power.

Whether the slowdown worsens or stabilises depends on the strength of rural demand, after a strong monsoon and recent easing of farm policies, as well as the pace of government spending and a possible easing of interest rates by the central bank, which has also loosened its grip on liquidity.

The starkest earnings underperformance was among consumer goods firms, especially those that sell daily-use products to the urban middle class.

Urban Indians, who account for more than one-third of the world's most populous nation, spend 71% more than their rural counterparts, according to monthly consumption data. Consumption comprises 60% of India's GDP.

Nestle India Chairman Suresh Narayan said the market was clearly facing muted demand, as well as pressure from inflation. "Food inflation has been a cause of concern due to sharp uptick in prices of fruits and vegetables and (edible) oil," he told reporters after the company's earnings release.

He noted that growth in the food and beverage sector, in double-digits just a couple quarters ago, is now down to 1.5-2%.

Analysts linked the slower spending growth to a decline in disposable incomes.

India economists at Citi note that growth in inflation-adjusted wage costs for listed Indian firms - a proxy for urban dwellers' earnings - has held below 2% for all three quarters of calendar 2024, and well below the 10-year average of 4.4%.

Not all the earnings news was bad. Colgate Palmolive reported stronger demand from rural areas, while Marico, which sells cooking oil brands popular with rural consumers, said it expects double-digit revenue growth in the second half of the financial year.

Sales of high-end goods also proved resilient. In the auto sector, Mahindra & Mahindra, which sells popular sports utility vehicles, outperformed earnings expectations, although Maruti, with a wider portfolio that includes entry-level cars, was more vulnerable to sluggish demand.

All in all, analysts and economists see the latest quarterly earnings as more bad news than good.

Jefferies India downgraded full-year earnings estimates for 63% of the 121 large companies it covers, the highest downgrade ratio since 2020, when the COVID-19 crisis hit. It attributed that to a cyclical slowdown in the economy.

For the full year, Barclays has lowered its forecast for GDP growth to 6.8% from 7%.

Will growth continue to slip in the second half of the financial year, or will it stabilise? Write to me with your views at [email protected].

QUOTE OF THE WEEK

"I look forward to renewing our collaboration to further strengthen the India-U.S. Comprehensive Global and Strategic Partnership. Together, let's work for the betterment of our people and to promote global peace, stability and prosperity."

Indian Prime Minister Narendra Modi congratulated Republican Donald Trump on Wednesday after he won the U.S. presidential election.

With Trump's win, India is open to freeing up market access for U.S. firms, sources told Reuters.

MARKET MATTERS

Investors hoping for a "Goldilocks" moment for emerging markets in 2025 are facing significant uncertainty after the U.S. presidential elections.

The dollar's rigorous rally, higher bond yields and the prospect of the Federal Reserve slowing the pace of interest rate cuts weighed on emerging market currencies.

Asia could be surprisingly resilient in the face of this increased uncertainty. Investors may also look for safety in Indian assets, given its domestically focused economy.

(By Ira Dugal; Editing by Edmund Klamann)

By Bharath Rajeswaran, Hritam Mukherjee and Shubham Batra

Nov 11 (Reuters) - Top Indian companies registered their worst quarterly showing in more than four years for the July-September period, raising concerns that a lurking economic slowdown had begun to affect corporate earnings.

More than 50% of the 44 firms in the blue-chip Nifty 50 index .NSEI that have reported earnings so far have either missed analysts' estimates or reported results in line with expectations, according to data compiled by LSEG.

This is their worst performance since the March 2020 quarter at the start of the COVID-19 pandemic, when only about 20% of the Nifty 50 companies beat estimates.

Curbed government spending in April-June, due to the national elections, that spilled over into the September quarter and above-normal rains impacted earnings outcomes, analysts at Jefferies and Bernstein said.

Indian equities have dropped about 8% from their record closing high notched on Sept. 26, with October marking the worst monthly performance for the stock market since March 2020.

The selloff was also exacerbated by foreign investors moving out their investments in the wake of China's recent stimulus.

"It appears the waters may get a bit turbulent for Indian equities in the near term," said Motilal Oswal.

According to Jefferies, the current season has had the highest earnings downgrades since April-June 2020 among the 121 companies under its coverage that have reported results so far.

Motilal Oswal, meanwhile, flagged an 8% decline in earnings growth for the 166 companies it covers - the worst in 17 quarters - compared to a pre-season estimated drop of 4%.

Bernstein, however, added that investors were still considering the weakness over the past several months as an anomaly due to an elongated period of strong growth.

"Once reality hits, we expect a further but limited moderation in the Nifty from current levels."

BLIP OR APPROACHING STORM?

The monsoon or election impact may only be a part of the problem, according to Bernstein, "with a broader economic slowdown seen across IIP, eight core industries, automobile demand or diesel consumption."

Construction firms UltraTech Cement ULTC.NS and Larsen & Toubro LART.NS flagged weak demand, while banks reeled under their inability to recover unsecured loans. FMCG giants Nestle India NEST.NS and Hindustan Unilever HLL.NS also noted dull urban consumption.

Factory growth slowed to an eight-month low in September, while economic growth slowed to 6.7% in April-June. Data for July-September will be released on Nov. 30.

Bernstein moderated its year-on-year growth expectations for September earnings to 0.6% for the top 100 stocks, from its previous 9% forecast, while retaining its full-year consensus earnings growth of 10.2%.

Venkatesh Balasubramaniam, managing director and co-head of research at JM Financial, said one quarter of earnings weakness was not enough to indicate an economic slowdown, saying it was "too soon" to make that call.

"There is a possibility that government capex picks up in the second half."

Jefferies, which also noted the earnings moderation as a reflection of a cyclical slowdown, said that things could pick up in the second half of fiscal 2025.

Government spending on capex has fallen 15% in the first half, it said. With weather disruptions behind, execution and spending will rise by 25% in the second half, supporting an earnings rebound and a bounce-back in markets, it said.

(Reporting by Shubham Batra, Bharath Rajeswaran and Hritam Mukherjee in Bengaluru; Editing by Janane Venkatraman)

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Adds analyst comment in paragraphs 4 and 6, background in paragraphs 5 and 9

Oct 24 (Reuters) - Shares in Hindustan Unilever HLL.NS fell 7% on Thursday, tracking their worst day in nine months, after reporting quarterly earnings below estimates due to an urban slowdown, with analysts expecting the pain to continue in the near term.

For the consumer goods industry, growth in urban pockets - which accounts for two-thirds of Hindustan Unilever's revenue - has lagged that in rural areas over the last three quarters.

Analysts do not expect a swift change in fortunes for large consumer goods makers such as Nestle India NEST.NS and Hindustan Unilever.

Axis Securities expects "short term pain" for Hindustan Unilever, analyst Preeyam Tolia said, adding that the brokerage anticipates 5%-6% revenue growth for the rest of this fiscal, versus a historical average of 10%.

Consumer goods majors also face stiff competition from smaller brands stepping up their product launches and expanding deeper into rural India.

"Competition has increased ... The regional players have become bigger," Tolia said.

For the second quarter, the Dove soap-maker reported a near-4% fall in profit to 26.12 billion rupees ($310.8 million), missing estimates of 26.88 billion rupees, according to data compiled by LSEG.

"A visible recovery remains elusive ... We are disappointed," Antique Stock Broking said in a note.

Among peers, Nestle India reported a drop in profit, while soft drink makers Dabur India DABU.NS and Varun Beverages VARB.NS posted downbeat India numbers

Hindustan Unilever's shares, which have been largely flat this year and are rated "buy", on average, were down 7.1% at 2,470 rupees. The stock is the second-biggest loser on the benchmark Nifty 50 .NSEI index.

Other consumer stocks including Nestle India, Britannia Industries BRIT.NS and Dabur India DABU.NS were down 1.5%-3%.

(Reporting by Praveen Paramasivam and Ashna Teresa Britto; Editing by Janane Venkatraman and Sonia Cheema)

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Repeats story filed on Oct. 20 without changes

By Aditya Kalra

NEW DELHI, Oct 20 (Reuters) - India's biggest group of retail distributors has asked the antitrust authority to investigate three quick commerce companies - Zomato's ZOMT.NS Blinkit, Swiggy and Zepto - for alleged predatory pricing, a letter showed on Sunday.

Quick commerce is a new shopping rage in India, with companies promising deliveries of anything from groceries to electronics within 10 minutes, reshaping how Indians shop and challenging e-commerce giants such as Amazon AMZN.O.

In a letter dated Oct. 18, All India Consumer Products Distributors Federation (AICPDF), which represents 400,000 retail distributors of major companies including Nestle NEST.NS and Hindustan Unilever HLL.NS, told the antitrust body quick commerce firms were practising predatory pricing - or offering deep discounts and selling below cost to lure customers.

Zomato's Blinkit, Zepto, and Swiggy, which runs the Instamart delivery service and is backed by SoftBank 9434.T, did not respond to Reuters queries.

The letter said several consumer goods companies were dealing directly with quick commerce firms to increase their reach, sidelining the traditional salespeople who for decades went from one shop to another to deliver orders.

Such practices make "it impossible for traditional retailers to compete or survive," said the letter, which is not public but was seen by Reuters.

"Implement protective measures for traditional distributors and small retailers to safeguard their interests," it urged the Competition Commission of India (CCI).

The CCI also did not respond to a query from Reuters and AICPDF declined to comment on its letter.

Annual sales on Indian quick commerce platforms are set to exceed $6 billion this year, with Blinkit having a nearly 40% market share, while Swiggy and Zepto around 30% each, research firm Datum Intelligence said.

The CCI has powers to initiate an investigation on its own if it find merit in complaints, a government official told Reuters on Sunday, asking not to be named because he was not authorised to speak publicly.

The CCI's investigation unit in August found bigger e-commerce players, Amazon and Walmart's WMT.N Flipkart, breached local laws through predatory pricing, allegations the companies deny.

Reflecting the strength of the quick commerce sector, Zomato's shares have doubled this year and Swiggy will in the coming weeks will launch its over $1 billion IPO.

(Reporting by Aditya Kalra; editing by Barbara Lewis)

(([email protected]; @adityakalra;))