Stock markets in India are trading lower after yields on the 10-year government bonds hit over 8% in the opening session today, first time since May 2015. Gains are largely seen in pharma stocks after BSE healthcare hitting all-time high. While, power stocks & bank stocks are witnessing selling pressure.
The BSE Sensex is trading down by 178 points and the NSE Nifty is trading down by 51 points. Meanwhile, the BSE Mid Cap index is trading up by 0.2% while, the BSE Small Cap index is trading up by 0.1%. The rupee is trading at 67.02 to the US$.
In the news from the FMCG sector. As per an article in a leading financial daily, ITC Ltd has acquired floor cleaning brand Nimyle from Kolkata-based Arpita Agro Products for an undisclosed amount. This marks ITC's entry into the home care segment.
Nimyle is the second largest brand in the floor cleaning segment in West Bengal and Odisha while has recently entered the North and selling through e-commerce firms like Amazon and Big Basket.
As per the reports, the small-sized deal will allow ITC the scope to build the category in East before taking it national. ITC has been acquiring brands in the FMCG segment which largely have a regional presence at low prices as part of its strategy to expand presence.
As part of this strategy, it had acquired the B Natural brand of packaged juices from Bengaluru-based Balan Natural Food and subsequently relaunched it with ambitions to overtake the top two firms, Dabur and PepsiCo. It last year acquired the once popular Charmis skin care brand from Colgate-Palmolive.
Three years back, it made a mid-sized acquisition by purchasing Savlon and Shower to Shower brands from Johnson & Johnson for around Rs 2-2.5 billion.
Notably, ITC is targeting Rs 1 trillion sales from the FMCG business by 2030 and company executives have earlier indicated it may enter into every possible FMCG category to achieve this. The packaged food business is at present driving the sales of the FMCG business.
To know more about the company, you can access to ITC's latest result analysis and ITC stock analysis on our website.
ITC share price was trading down by 0.8% at the time of writing.
Moving on to the news from the pharma sector. As per an article in a leading financial daily, Aurobindo Pharma has received final approval from the USFDA to manufacture Omeprazole delayed-release tablets OTC, 20mg.
Omeprazole delayed-release tablets are generic equivalent of AstraZeneca's Prilosec OTC tablets.
Reportedly, the said product will be launched in June 2018.
Omeprazole tablets are indicated for the treatment of frequent heartburn (occurs 2 or more days a week). The estimated market size of Prilosec OTC tablets is US$ 222 million for the twelve months ending March 2018, according to Nielsen data.
This is the 141st ANDA (including 20 tentative approvals) to be approved out of Unit VII formulation facility in Hyderabad, India used for manufacturing oral products.
Aurobindo now has a total of 369 ANDA approvals (336 Final approvals including 17 from Aurolife Pharma LLC and 33 tentative approvals) from USFDA.
Speaking of pharma sector, did you know the BSE Healthcare Index is down 20% over the past three years? During the same period, the BSE Sensex is up 21%.
The BSE Healthcare Index has underperformed the Sensex
And this was a sector they called 'evergreen'.
Have Investors boarded a plane that's about to crash? Or is it just turbulence on the way to a smooth and safe landing?
It's important to understand the core issues. Regulatory problems for pharma companies have increased over the past few years. The frequency of visits as well as quality expectations have increased a lot.
While we expect the pain to continue in the short-term, the long-term picture still looks bright.
Stricter norms and pricing pressure will ensure only quality players remain. Companies with strong R&D facilities and quality compliant plants will have an edge over the others.
To know more about the company, you can access to Aurobindo Pharma's latest result analysis and Aurobindo Pharma stock analysis on our website.
Aurobindo Pharma price was trading up by 3% at the time of writing.
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