Dark monsoon clouds are seen over the Bombay Stock Exchange building in Mumbai, India. (Photographer: Prashanth Vishwanathan/Bloomberg News)

BQ Edge | Clouds Gather Over Sun TV’s Shares

BQEdge is specially curated for BQBlue subscribers. Every day this note will offer special equity market and stock-specific insights and flag select emerging trends in the tricky-to-trade derivatives market.

On Today’s Edition:

  • Why shares of south-India based broadcaster Sun TV may be under spotlight this week
  • TDI, Sheela Foam And GNFC

Watch | A Weak Signal For Sun TV

TDI, Sheela Foam And GNFC

A key raw material used in making foam and mattresses has seen a sharp decline in price over the last many months.

The price of Toluene Di-Isocynate has dropped to a multi year low, close to June 2016 prices.

As per the last available data on the company’s website, TDI prices in October were at Rs 230 per kg versus the peak of Rs 295 in June.

Bloomberg data shows there has been further pressure on prices, with TDI in China falling 40 percent since the the start of October.

BQ Edge | Clouds Gather Over Sun TV’s Shares

For mattress maker Sheela Foams Ltd. TDI costs constitute 22 percent of net sales for FY18. Quite obviously a fall in this key raw material will help boost the company's margins. A two-year-old analyst estimate suggested that every 5 percent change in TDI prices could have an impact of 80 bps on the company’s margin.

But, to be clear, fluctuations in the U.S. dollar and changes in the price of another key raw material — Polyol — could offset gains for Sheela made on the TDI front.

On the flip side, this fall in TDI prices might not be good news for manufacturer GNFC, as it contributed just over 26 percent of its FY18 turnover as per the company's annual report. GNFC as of FY18 had 65 percent market share in TDI in India.