Maggi ban fallout: Nestle India stock down
A day after reporting a net loss of Rs 64.4 crore in its second quarter, Nestle India's stocks opened at 6,011 on Thursday.business Updated: Jul 30, 2015 12:28 IST
A day after reporting a net loss of Rs 64.4 crore in its second quarter, shares of Nestle India fell 2.54% in intraday trade on Thursday.
The company's shares opened at opened at 6,011 on Thursday. It had closed at 6,147.30, on Wednesday.
The loss during the April-June quarter was on account of the sales taking a hit after its popular Maggi noodles were withdrawn from the market over safety concerns.
“Results for the quarter have been impacted by the Maggi noodle issue,” Nestle India said.
Last year, the company had reported a net profit of Rs 288 crore for the same quarter.
Nestle has been at the centre of the country’s worst food scare in a decade after food regulators in various states reported that Maggi noddle packs contained high levels of lead and MSG (monosodium glutamate). While the company subsequently removed the entire stock from the markets, it maintains that the products are safe.
In the quarter under review, net sales worth Rs 288 crore were reversed in relation to the Maggi noodles stock being withdrawn from trade partners and market, the company said.
Nestle India said it booked an exceptional charge of Rs 451.7 crore in the quarter “relating to estimates of loss on account of stocks withdrawn, including incidental costs thereto and other related costs incurred exclusively in the ordinary course of the business”.
“Nestle India is making all efforts and will continue to engage with authorities to bring Maggi noodles back on the shelves,” Suresh Narayanan, due to take over as the company’s India MD in August, said.
Nestle India shares closed down 0.6% on the BSE on Wednesday.