Backed by persistent buying activity across index heavyweights, Indian equity markets continued to trade in the positive territory during the post noon trading session. Barring stocks from IT sector, all the sectoral indices are trading in green. Most noticeable upward movement is witnessed in the stocks from the banking and the consumer durables sectors.
Majority of the FMCG stocks are trading in the green with P&G Hygiene and Hindustan Unilever (HUL) amongst the major gainers. However, Dabur and Emami are among the few stocks trading in the red. As per a leading financial daily, Fast Moving Consumer Good (FMCG) companies are taking the legal route to prevent counterfeiting of their brands by other small players. Dabur India won a case against Bajaj Herbals pertaining to the infringement of its toothpaste brand Meswak. The company is also fighting a case where its air freshner brand Odonil has been launched by a local company as Odokill. Emami received a favourable ruling against HN Pharmacy and Nakoda Enterprises for copying its popular Zandu balm used to provide pain relief. Similarly companies like Asian Paints and Pidilite Industries have taken a legal recourse to protect their Utsav and Fevicol Marine brands, respectively. For FMCG companies, brands are important assets that ensure recall value and steady demand. Rampant misuse of any brand trademark can eventually lead to its dilution, eroding the overall value of the brand. Therefore established FMCG companies zealously protect their intellectual property to hold on to their turf. In fact companies like Emami have opened a separate Brand Protection Cell comprising of retired police officers, which work towards hunting down counterfeit products.
Most of the Indian pharma stocks are trading in the green with Elder pharma and Torrent pharma leading the pack of gainers. As per the financial daily, Cadila healthcare and Torrent pharma are into preliminary talks of merging both the companies. The merger will help to have diversified portfolio in the domestic market, as Torrent has a portfolio of drugs for chronic segment while Cadila Healthcare has good presence in the acute segment. Reportedly, if the merger takes place, the new entity will become India's third largest pharmaceutical company in terms of sales after Sun Pharmaceuticals and Dr Reddy's. The merger will also strengthen the ANDA (Abbreviated New Drug Application) pipeline in US. Cadila and Torrent both were trading up by 0.75% and 3.3% at the time of writing.