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FMCG Stocks Remain Subdued
Tue, 9 Aug 01:30 pm

Indian indices continued edging lower during the post noon trading session. Major sectoral indices are trading in the red with metal and FMCG witnessing maximum selling pressure.

The BSE Sensex is trading lower by 205 points (down 0.7%) and the NSE Nifty is trading lower by 60 points (down 0.7%). The BSE Mid Cap index & BSE Small Cap index are both trading up 0.7%. Gold prices, per 10 grams, are trading at Rs 31,101 levels. Silver price, per kilogram is trading at Rs 46,088 levels. Crude oil is trading at Rs 2,861 per barrel. The rupee is trading at 66.96 to the US$.

As per an article in The Economic TImes, Mahindra & Mahindra (M&M) is planning to set up the country's first auto shredding unit in Gujarat or Maharashtra along with MSTC, a government owned company.

Reportedly, a new company will be set up by Mahindra Intertrade and MSTC through an equal joint venture. Mahindra Intertrade is part of Mahindra Partners Division.

The idea behind the JV is to meet India's annual scrap requirement of 5-6 million tonnes (MT). The demand is currently met through imports (Subscription Required).

This facility will establish an Integrated Automotive Recycling capability for end of life vehicles from collection, transportation, dismantling, shredding, recycling, and disposal. And its capacity will be about 1-1.5 lakh tonnes depending on the product mix, the reports noted.

Furthermore, the raw material for these facilities will come from old vehicles and consumer durables. The finished product, steel scrap, will be sold in the open market. Recently, government imposed a minimum import price (MIP) on specific steel products. Sarvajeet Bodas, our research analyst has offered a few bits on the steel industry post MIP (Subscription Required).

Besides saving on forex as a result of import substitution of scrap, whether this JV also aid recycling end of life vehicles and reduce dependence on mining iron ore and other resources will be a key thing to watch out for going forward.

Subscribers can also access to M&M's latest result analysis (Subscription Required) on our website.

Moving on to the news from pharma sector. According to an article in a leading financial daily, Cadila Healthcare has acquired a derma brand Melgain lotion from Issar Pharma to strengthen its dermatological portfolio.

Melgain is used for the treatment of autoimmune disease, Vitiligo. It is a chronic skin condition characterized by portions of the skin losing their pigment.

In India, Melgain will be marketed by Liva Healthcare, a specialty division catering to the dermatological division. It may also launch this product in other global markets where it is not available, the company stated.

As per the reports, the dermatology market is presently growing at 14% and is valued at Rs 60 billion. Cadila's entrance into the re-pigmentation segment will give Zydus Group an edge in this space.

Considering the pharma's regulatory distresses, are Indian pharma companies now adapting to the scrutiny by the USFDA? Bhavita Nagrani, our pharma sector analyst, shares her insights in one of our premium editions of The 5 Minute Wrap Up (Subscription Required).

Cadila Healthcare Ltd was trading up by 0.6% at the time of writing.

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Mar 20, 2018 (Close)