Nestle India market cap crosses Rs 1-trillion; stock rises 50% from Feb low

Nestle India on Tuesday became the third listed fast moving consumer goods (FMCG) company to join the elite club of firms that have seen their market capitalisation (market cap) soar past the Rs 1 trillion mark.
With Rs 1.01 trillion market cap, Nestle India stands at 28th position in overall market-cap ranking at 11:23 am; the BSE data shows. The stock is trading at its all-time high level of Rs 10,450, up 2.4% in otherwise subdued market. The S&P BSE Sensex was trading 0.12% or 45 points higher at 36,369 levels.

Hindustan Unilever (HUL) is the country’s most valued FMCG Company with a market cap of Rs 3.67 trillion, while ITC have market cap of Rs 3.32 trillion, data shows.

Thus far in the calendar year 2018, Nestle India has outperformed the market by surging 33%, as compared to 7% rise in the Sensex. The stock rallied 50% from its February 9, 2018 low of Rs 6,959 against 7% rise in the benchmark index.

Nestle hits new high as Q1 profit beats estimates; inches towards Rs 10,000

Nestle India hit a new high of Rs 9,610, up 7% on the market in intra-day trade, inches towards Rs 10,000 mark after the company reported a better than expected 38% year on year (YoY) growth in net profit at Rs 4.24 billion in March 2018 quarter (Q1CY18).
Analysts on an average had expected profit of Rs 4.06 billion for the quarter from the fast moving consumer goods (FMCG) company.

Domestic sales grew 13.4% at Rs 25.60 billion on a comparable basis, adjusted for Goods and Services Tax (GST). Exports were up 6% at Rs 1.78 billion.

“During the quarter the company has sustained growth momentum, which is backed by broad volume based growth across categories. This is in line with the company’s strategy of broad based growth through increased penetration,” said Suresh Narayanan, Chairman and Managing Director, Nestle India.

EBIDTA (EBITDA (Earnings before interest, tax, depreciation and amortization) margin improved 25.5% in Q1CY18 from 22.5% in Q4CY17 and 20.9% in Q1CY17.

Maggi compliant with latest FSSAI norms, no ash added: Nestle after UP fine

FMCG major Nestle India said on Monday that Maggi complied with the latest guidelines of food safety regulator Food Safety and Standards Authority of India (FSSAI) and it does not add any ash to its popular noodles.

District administration of Shahjahanpur, UP, had slapped a fine on Nestle India and its distributors last week after Maggi had allegedly failed to pass the lab test and found ash content above the permissible limits for human consumption.

"Nestle wishes to categorically state that we do not add ash in any form whatsoever during the manufacturing process of its Maggi noodles," Nestle India Chairman and Managing Director Suresh Narayanan told reporters here.

Speaking on the sidelines of a CII event here, he said the company has received the order of the district administration and will decide on the future course of action after studying it.

"We are fully compliant with the latest FSSAI guidelines which were issued in August-September this year..." he added.

He declined, however, to comment further saying that "the matter is sub-judice".

In June 2015, Nestle India withdrew Maggi noodles from the market. It had relaunched them in November after it went off the market for five months due to a ban by FSSAI over alleged presence of lead beyond permissible limits.  

Maggi noodle in crisis, again: After lead, now it's ash taking away spice

Just when India’s favourite instant noodle brand Maggi was about to claim back its dominance over the market, the iconic brand is under pressure, again. Maggi noodle, which had earlier faced a lot of scrutiny and a subsequent market share loss over an alleged presence of lead, is now under a regulator's scanner over alleged violation of another safety norm.

The district food and drug administration officials of Shahjahanpur in Uttar Pradesh, have sent a legal notice to Nestle India – the makers of Maggi noodle – and its trade partners in the region, seeking Rs 71 lakh as damages and for violation of food safety norms. The notice was issued after the UP FDA found a high level of ash content in the samples of the noodle. According to a PTI report, the Maggi noodle samples were collected from the Shahjahanpur area in November 2016.

While Nestle India is yet to receive a copy of the notice, it told Business Standard that the lab report might have been formed on the basis of quality standards that are now obsolete. However, the question that haunts millions of consumers and its patrons is how the noodle failed a lab test after the matter was settled in 2016, when the country’s apex court had given it a clean chit following stringent tests at independent laboratories across India.

After lead, it's ash:
From the facts that have emerged so far and from a research done by this publication, it prima facie appears that the issue of ash content in packaged food, specifically in case of Maggi noodle, is an ambiguous area. Last time, when Maggi noodle was found to be sub-standard for human consumption, the main issue pertained to the presence of lead in a quantity higher than permissible. This, eventually led to a ban on the products across the country on 5 June, 2015. What followed was a period of uncertainty for the Swiss major in India and elsewhere.
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