Last week, the Indian arm of the FMCG major received favorable results from all three laboratories mandated by Bombay High Court to test noodles samples. However, Nestle had said that it will start selling Maggi noodles only after the newly manufactured products are also cleared by the designated three laboratories.
So, How To trade Maggi Now?
State governments in Karnataka and Gujarat have lifted the ban on sale of Maggi noodles, following the announcement by Nestle India that the Bombay High Court mandated labs haven’t found harmful levels of lead and presence of monosodium glutamate (MSG).
Supported by raising hopes of Maggi noodles, return to the shelves, Nestle India shares ended 0.8 higher at Rs 6,533 on Tuesday on the Bombay Stock Exchange (BSE) despite weakness in the broader markets.
So, It Is The Right To Buy The Nestle India Stock
While most of the analysts have turned positive on the stock, a few cautions about jumping into the stock.
Japanese brokerage Nomura sees Maggi noodles returning to the shelves soon and maintains a buy rating on the stock.
“There would be a short-term impact on sales and profitability of the company for a few quarters, but the company should be able to fix the product and bring it back to the market,” moneycontrol.com quoted Nomura as saying.
Nomura has a target price of Rs 6,950 for the Nestle India stock.
ICICIdirect.com suggests investors to buy the stock at current levels and it forecasts the stock price to touch Rs 7,240.
In contrast, Religare recommends selling the stock at current prices, citing its “rich valuation”. It expects the stock to fall to Rs 5,500.