Nestle India's Q2 net profit down 60% to Rs124 cr as Maggi row bites
29 Oct 2015
Nestle India Ltd has reported a 60 per cent drop in its net profit for the July-September 2015-16 quarter, hit by massive loss of sales after the company was forced to withdraw its popular 2-minute noodle `Maggi' across the country, following reported finding of excessive led content and the presence of tastemaker MSG.
The India unit of Swiss food giant Nestle SA posted a net profit of Rs124 crore for the quarter ended 30 September, compared with Rs311 crore in the year-ago quarter.
Net sales for the quarter fell 32 per cent to Rs1,736 crore. Nestle said its sales fell by about Rs15.3 crore during the quarter as a result of the withdrawal.
The company has now come out of the regulatory tangle, but is yet to restart production and marketing of its most successful product.
Nestle had challenged the ban enforced by Indian food regulator Food Safety and Standards Authority of India (FSSAI) at the Mumbai high court, which had ordered retesting of Maggi noodle samples at three separate laboratories.
The ban was imposed after local regulators reported in May that some packets of Maggi noodles contained unsafe levels of lead. Nestle had to order a recall of the product next month, which cost it about 66 million Swiss francs ($67 million).
Earlier this month, Nestle said in a statement it had received test results from all three labs mandated by the Bombay High Court and all 90 samples, covering six varieties, were safe to eat. The company has since started manufacturing the popular noodles again.
Reports quoting company sources say Nestle planned to resume sales of Maggi noodles in India in November.
The company had informed BSE that since the unaudited financial results of the company for the quarter ending on 30 September 2015 will be considered and approved by its board of directors at its meeting on 29 October, the trading window in respect of the equity shares of the company will remain closed from 1 October 2015 to 31 October 2015.
