Nestle India erases losses as Maggi back in shelves

NEW DELHI: Shares of Nestle India entered the positive terrain after falling over a per cent in Monday's trade after the company resumed manufacturing of Maggi at three of its plants. At 9.50 am, the stock was trading 0.30 per cent higher at Rs 6,190 in an otherwise weak market.

Earlier in the session, the stock had hit a low of Rs 6,109.05, which was 1 per cent lower than Friday's close of Rs 6,171.85.

The stock has been under severe strain since June after some Maggi samples were found to contain seven times the permissible lead levels. On June 4, authorities in Uttarakhand issued a notification to ban manufacture, storage, distribution and sale of Maggie noodles for 90 days.

Following the development, the Food Standards Safety Authority of India (FSSAI) ordered the company to withdraw and recall all the variants of its Maggi noodles from the market. The company reported a 60 per cent drop in September quarter net profit. The company's PAT stood at Rs 124.20 crore for the quarter, down from Rs 311.30 crore in the year-ago period.

Net sales fell 32.12 per cent to Rs 1,736.20 crore from Rs 2,557.80 crore reported for the same quarter last year. The company in a filing to BSE on Monday pointed out that it was engaging with the authorities to obtain directions to commence manufacturing I two locations - Tahliwal and Pantnagar.

The company has resumed manufacturing at Nandangud (Karnataka), Moga (Punbaj) and Bicholim (Goa).