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Nestle Sees a 60% Drop in Profit as The Lack of Maggi Continues To Hurt

Nestle’s been badly hit with the Maggi controversy and continues to be in bad shape. Profits are down 60% while revenues fell 32% (year on year) in the quarter.

(Figures are Rs. Million)

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They have apparently resumed production of Maggi and are awaiting results of tests in order to start sales.

Nestle has been under pressure ever since the Maggi crisis came about. The stock, though, hasn’t fallen quite as much as the 60% fall in profit:

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Disclosure: No positions, no connections with Nestle.

  • Shan says:

    The halo effect of being an MNC is such that no matter how bad the results are, the stock price never falls as much. Imagine if this were not an MNC but a ‘local’ company, what would have happened. Enormous carnage in the stock with media falling over one another recommending a ‘sell’. This can’t go on forever though. The MNC bubble has to burst one day, the stock prices have to follow the results…

  • Krish says:

    Hardly Nestle fell below 6K. It declared heavy loss in Q1 and even then it did not go below 6K. Market heavily biased towards MnC stocks. Look at DCB, market did not like the expansion plan, stock hammered 36% in one week plain. Nestle goes through legal & regulatory hurdles, product ban for nearly 1 year, product trustworthiness took heavy beating and it takes long time to win the trust of mothers. In spite of all this, stock price fell only 15%. As soon as the products comes on to the shelves in select states which removed ban, the stock price may zoom to 30%.