Nestle India drops after reports govt wants more tests on Maggi noodles

Nestle India dropped 0.9% to Rs 6,086.40 at 14:30 IST on BSE after reports government sought further testing of 31 batches of Nestle's popular Maggi instant noodles at an accredited laboratory to check safety of consumption.

Meanwhile, the BSE Sensex was up 35.78 points, or 0.14%, to 25,855.12.

On BSE, so far 2,130 shares were traded in the counter, compared with an average volume of 11,432 shares in the past one quarter.

The stock hit high of Rs 6,150 and low of Rs 6,072 so far during the day. The stock hit a record high of Rs 7,499.95 on 10 March 2015. The stock hit a 52-week low of Rs 5,499 on 8 June 2015.

The stock had outperformed the market over the past one month till 23 November 2015, declining 2.95% compared with 6.01% decline in the Sensex. The scrip had also outperformed the market in past one quarter, gaining 0.7% as against Sensex's 5.65% fall.

The large-cap company has an equity capital of Rs 96.42 crore. Face value per share is Rs 10.

The government has reportedly told National Consumer Disputes Redressal Commission (NCDRC) which is hearing its Rs 640 crore class action suit against Nestle India that it would like to test 31 more samples of Maggi instant noodles.

Nestle India had relaunched Maggi noodles on 9 November 2015. On 4 November 2015, Nestle India had announced that all the samples of the Maggi Noodles Masala have been cleared with lead much below permissible limits after the company received results from all three NABL (National Accreditation Board for Testing and Calibration Laboratories) accredited laboratories mandated by the Bombay High Court to test newly manufactured Maggi noodles samples.

Nestle India said it has conducted over 3500 tests representing over 200 million packs in both national as well as international accredited laboratories for testing and all reports are clear. In addition to these, various countries including USA, UK, Singapore, Australia and others have found Maggi noodles exported from India safe for consumption, it added.

It may be recalled that the Food Safety and Standards Authority of India (FSSAI) had banned the production and sale of Maggi in June 2015 amid claims that samples contained dangerously high levels of lead and the taste enhancer monosodium glutamate (MSG).

Nestle India's net profit fell 60.1% to Rs 124.20 crore on 32.1% decline in net sales to Rs 1736.20 crore in Q3 September 2015 over Q3 September 2014.

Nestle India is a subsidiary of Nestle S.A. of Switzerland. Nestle is the world's leading nutrition, health and wellness company. Nestle S.A. held 34.28% stake in Nestle India (as per the shareholding pattern as at 30 September 2015).

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