Nestle India’s Market Value Rises After Several Product Launches

After having re-launched Maggi cup noodles and the new Hot Heads range of noodles, Nestle India’s market value is on the rise. With this increase, Nestle India is well on its way to establishing itself as a dominant noodle brand in India again; it has recovered from the slump post the Maggi ban.

The Background: The Maggi Ban

The Maggi ban can be traced back to May 2015, when the FSDA that Maggi samples in Uttar Pradesh had 17 ppm of lead, over and above the permissible limit of 0.01 ppm. The tests also found that the noodles contained high levels of MSG.

Following these findings, state governments across India began issuing bans on Maggi and customers were hard pressed to find packets of the much loved noodles on shelves across the country.

In November, following a wagon load of tests and appeals, Maggi hit the shelves again. Since then, Nestle India has been aggressively re-launching Maggi products as well as a range of other products like Greek yogurt and coffee variants to establish their position in the Indian FMCG market.

The Comeback

Last month, reports said that Nestle’s stock prices had reached a 52 week high of Rs.7,155 which were similar to the levels before the Maggi ban.

“At a sectoral level, consumer goods are a good pick for investors. The monsoon advancement is good. The recommendations of the seventh pay commission will be implemented soon. All of this augur well for consumer companies. Nestlé has taken steps to get out of the crisis and this has improved investor confidence,” said an analyst from a Mumbai-based brokerage house to the Business Standard at the time.

At the end of the June quarter, Nestle India reported a profit of  Rs.230.84 crore which was Rs.458% more than the net loss of Rs.64.40 crore last year at the same quarter.

Following the launch of Maggi Hot Heads and the No Onion No Garlic masala noodles last week, Maggi Nestle India shares were up 0.37% at Rs.6736.

Looking at these numbers, its safe to say that Nestle India has re-established itself as one of India’s dominant FMCG food brands. It only gets better from here!