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Nestle India gains on bargain hunting

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Nestle India rose 3.28% to Rs 6,891 at 10:21 IST on BSE on bargain hunting after the stock fell 5.56% in the preceding three trading sessions to Rs 6,671.85 on 1 June 2015 from a recent high of Rs 7,064.85 on 27 May 2015.

Meanwhile, the BSE Sensex was down 125.21 points, or 0.45%, to 27,723.78.

On BSE, so far 4,451 shares were traded in the counter, compared with an average volume of 3,609 shares in the past one quarter.

The stock hit a high of Rs 6,987.45 and a low of Rs 6,740 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 4,755 on 5 June 2014.

The stock had underperformed the market over the past one month till 1 June 2015, rising 1.38% compared with 3.10% rise in the Sensex. The scrip had, however, outperformed the market in past one quarter, falling 4.71% as against Sensex's 5.15% fall.

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

Nestle India announced after market hours yesterday, 1 June 2015, that it understands that consumers are concerned by reports that the authorities in Uttar Pradesh have found elevated levels of lead in a sample pack of Maggi noodles. The company said it is fully cooperating with the authorities who are conducting further tests and the company is awaiting the results.

Nestle India has submitted samples of Maggi Noodles from almost 600 product batches to an external laboratory for independent analysis and the company tested samples from almost 1,000 batches at its accredited laboratory. These samples represent around 125 million (12.5 crore) packets. All the results of these internal and external tests show that lead levels are well within the limits specified by food regulations and that Maggi Noodles are safe to eat. The company is sharing these results with the authorities.

The company regularly monitors all its raw material for lead, including testing by accredited laboratories which have consistently shown levels in Maggi Noodles to be within permissible limits. In addition, the company remains committed to continuing to improve the quality of agricultural raw materials across the food chain working with farmers, suppliers, authorities and the food industry to ensure food safety. The quality and safety of products are the top priorities for the company, Nestle India said in a statement.

In April 2015, Uttar Pradesh Food Safety and Drug Administration (UP FSDA) asked Nestle India to withdraw a batch of Maggi noodles which were manufactured in February 2014 after it found high levels of added monosodium glutamate (MSG), a taste enhancer, in the noodles and lead beyond permissible limits.

Nestle India's net profit rose 23.6% to Rs 320.28 crore on 8.4% growth in net sales to Rs 2506.79 crore in Q1 March 2015 over Q1 March 2014.

Nestle India is a subsidiary of Nestle S.A. of Switzerland. It manufactures milk products and other food products.

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First Published: Tue, June 02 2015. 10:12 IST