Nestle India rose 0.4% to Rs 6,978.05 at 11:12 IST on BSE after the company issued a detailed clarification with regard to reports on recall of MAGGI noodles in India.
The announcement was made after market hours yesterday, 21 May 2015.
Meanwhile, the S&P BSE Sensex was up 173.70 points or 0.62% at 27,983.05.
On BSE, so far 1,540 shares were traded in the counter as against average daily volume of 3,265 shares in the past one quarter.
The stock was volatile. The stock rose as much as 2.51% at the day's high of Rs 7,125.25 so far during the day. The stock fell as much as 0.44% at the day's low of Rs 6,919.45 so far during the day. The stock had hit a record high of Rs 7,499.95 on 10 March 2015. The stock had hit a 52-week low of Rs 4,571.50 on 21 May 2014.
The stock had outperformed the market over the past one month till 21 May 2015, gaining 0.93% compared with Sensex's 0.48% rise. The scrip had also outperformed the market in past one quarter, sliding 3.22% as against Sensex's 4.86% fall.
The large-cap FMCG company has equity capital of Rs 96.42 crore. Face value per share is Rs 10.
Nestle India said that on 30 April 2015 the local authorities in Lucknow asked the company to recall one batch of MAGGI Noodles (around 2 lakh packs) which were manufactured in February 2014 and had already reached the 'Best Before date' in November 2014. The company's current practice is to collect stock that is near 'Best Before date' from distributors/retailers so the company is confident that these packs are no longer in the market, Nestle India said. The company does not agree with the order and is filing the requisite representations with the authorities, it added. In the meantime it is important to note that there are no other orders to recall MAGGI Noodle products in the market, the company said. People can be confident that Maggi Noodle products are safe to eat, it added.
Nestle India said that the quality and safety of its products are its top priorities. The company has in place strict food safety and quality controls at MAGGI factories, including thorough quality checks at each stage of our raw material sourcing and manufacturing process. This includes comprehensive testing to ensure that MAGGI Noodles comply with all applicable food safety laws, as well as the company's own high standards of quality and safety before they reach consumers, Nestle India said.
Nestle India said that the company is aware of reports that tests by the local authorities have detected Monosodium Glutamate (MSG) in a sample of MAGGI Noodles and that they are continuing their investigation. The company has submitted product samples to an independent accredited laboratory and will share the results with the authorities, it added.
Nestle India said that the company does not add MSG to MAGGI Noodles sold in India and this is stated on the concerned product. However, the company uses hydolysed groundnut protein, onion powder and wheat flour to make MAGGI Noodles sold in India, which all contain glutamate. The company believes that the authorities' tests may have detected glutamate, which occurs naturally in many foods, Nestle India said. The company said that it was also aware of the reports of elevated levels of lead in a pack of MAGGI Noodles analysed by the authorities.
Nestle India said that it regularly monitors for lead as part of its stringent quality control processes, including testing by accredited laboratories. These tests have consistently shown lead levels in MAGGI Noodles to be within permissible limits. The company has submitted product samples to an independent accredited laboratory and will share the results with the authorities, Nestle India said.
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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