Sharemasterindia.com: Nestle shares dropped as much as 4.85 per cent in morning trades on Friday following the FMCG major's Thursday decision to take Maggi noodles off the shelves. However, buying was seen at lower levels, leading to a sharp recovery in Nestle shares.
Maggi noodles, which contributes over 20 per cent to Nestle's revenue and nearly 30 per cent to its bottom line, has been under country-wide scrutiny for high lead content and mono-sodium glutamate or MSG, a taste enhancer.
Nestle said in a statement, "Recent developments and unfounded concerns about the product have led to an environment of confusion for the consumer, to such an extent that we have decided to withdraw the product off the shelves, despite the product being safe."
The sharp selloff in Nestle shares has dented the company's market cap by nearly Rs 10,000 crore in the previous five sessions.
The over 15 per cent correction in Nestle shares has led some analysts to turn positive on the stock.
Market analyst Ambareesh Baliga told NDTV that long-term investors can take a look at Nestle.
"The sock is in downtrend and can fall 10-12 per cent from here, but India is a huge market for Nestle... I think Nestle will come back with a solution," Mr Baliga added.
Lancelot D'Cunha, CEO of ITI Wealth Management said it is difficult to time the bottom of Nestle, but one can look at buying the stock at different levels. It's a stock that needs to be held for 2-4 years, he added.
As of 10.10 a.m., Nestle shares traded off the day's low at Rs 5,718, down just 1 per cent at Rs 5,950.
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