Share prices of Maggi maker Nestle India soared on Thursday after the Bombay High Court ruled in favour of the company and lifted a ban on the instant noodles imposed by the country's food regulator. The court asked the Food Safety & Standards Authority of India (FSSAI) to "justify its ban" and ordered for fresh tests of the noodles at laboratories opted by it.
"The writ petition has been allowed and both ban orders have been set aside. Manufacture and sale of Maggi noodles is subject to certain conditions, which will be informed after the judgement is received," Nestle India said in a statement to BSE.
Maggi noodles may return to the shelves again if the tests show that earlier results are incorrect, NDTV Profit reported, citing lawyers familiar with the case.
Stock prices of Nestle India rose Rs 248 or 4 percent to trade at Rs 6,433 on the Bombay Stock Exchange (BSE). Overall, Nestle India shares have posted a gain of over 16 percent from a low of Rs 5,539.80 registered on 8 June when the crisis over the popular noodles was at its peak.
The court ruling raises hopes that Nestle India will soon be able to regain its market share, which had eroded after controversy erupted over its popular noodle brand, which contributes about 15 to 20 percent to its overall revenues.
On 5 June, FSSAI had ordered Nestle India to recall all available stocks of Maggi noodles after finding harmful levels of lead and monosodium glutamate (MSG) in tested samples.
Earlier this month, the Goa Food and Drugs Administration (FDA) had said that it found Maggi noodles safe to eat, after substantiating its tests results with Mysuru's Central Food Technological Research Institute (CFTRI).
Following a ban on its popular Maggi noodles, Nestle India has witnessed its first quarterly loss in 17 years. It posted a loss of Rs 64.4 crore in the June 2015 quarter compared to a profit of Rs 288 crore in the same period last year.
The company's sales fell by over 19 percent to Rs 1,957 crore in the April-June quarter as against Rs 2,432 crore in the corresponding quarter a year ago. The company also saw a one-time loss of Rs 452 crore during the quarter.