Nestle India surges as FSSAI-approved lab finds Maggi safe

NEW DELHI: Nestle India surged over 10 per cent in trades on Wednesday and was looking to log its biggest daily percentage gain in eight years amid reports an FSSAI-approved laboratory of Central Food Technological Research Institute (CFTRI) has found Maggi noodles to be in compliance with the country's food safety standards.

The stock surged 10.17 per cent to hit its intraday high of Rs 7,000 on the BSE.

Amid controversy over excess lead in the instant noodles, the company had recalled 23,000 tonnes of Maggi between June and July.

As a result, the company posted a net loss of Rs 64.40 crore for the June quarter, compared with a profit of Rs 287.9 crore in the year-ago period. The company incurred a one-time loss of Rs 451.70 crore for the quarter due to the Maggi row.

The prepared dish segment contributes nearly 30 per cent to the company’s overall revenues, while Maggi forms approximately 25 per cent of overall revenues, Edelweiss Securities in a note pointed out.

“Apart from this, the brand perception has also taken a hit which impacted growth of other brands as well,” it added.

CFTRI had tested five samples sent by Goa Food and Drug Administration when Maggi was banned in June.