Should you buy Nestle India now?

Nestle India’s stock soared 7% today after the company announced clear results of Maggi samples tested at court-mandated laboratories. Incidentally, the upswing comes on the day when its Swiss parent reduced its full-year revenue growth outlook as a Maggi noodle recall in India knocked sales and under-calculated US Skin Health rebates weighed on the profits.

For Nestle India, the development comes days ahead of the company announcing its Second quarter results on October 29, 2015. While it is definitely a strong reason for the company’s investors to be bullish, it may take some time for the Maggi sales to resume in the retail market. Though Nestle will commence manufacture of Maggi noodles, it will start selling only after the newly manufactured products are also cleared by the designated laboratories.

Investors can watch out for management’s commentary in the upcoming results on how soon Maggi is expected to be reintroduced and sold in the country.