Cabinet approval to Rs 11,000-cr National Mission on Edible Oil: Big stamp on Zee Business coverage! What does it mean for FMCG, oil producing companies?

The union cabinet has approved the National Mission on Edible Oil with an investment of Rs 11000 crore, confirmed senior Research Analyst Varun Dubey explaining that the government aims to run this scheme till November 1, 2037.

The government aims to reduce the edible oil import under this mission. At present, the edible oil consumption annually in India is 240 lakh tonne, of which 110 lakh tonne is produced in India and the remaining 130 lakh tonne is imported.

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The government will pay the difference if the import price of edible oil fluctuates, which means the price would be regulated. This scheme will play a key role for the companies that use palm oil as their raw material such as FMCG companies in manufacturing soaps, biscuits, snacks as along edible oil.

Besides FMCG companies such as HUL, Godrej Consumers among others will have an advantage of this scheme, however, the most benefitted would be edible oil producers like Manorama Industries.

ज़ी बिज़नेस की खबर पर मुहर...

नेशनल मिशन ऑन एडिबल ऑयल को कैबिनेट से मंजूरी...

मनोरमा इंडस्ट्रीज को क्यों और कैसे होगा इस स्कीम से बड़ा फायदा?

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Manorama Industries is into speciality oil business, especially Sal and Kokam seeds. It manufactures Castrol Oil, Rice Bran Oil as well as bakery and chocolate products. It also enjoys oilseed import incentives. The company received an award for producing the highest hybrid sal seed in FY 2019-20. 

Moreover, the company is also planning capacity expansion, similarly, its balance sheet is good too, as debt to equity is 0.6 and market-cap to sales at 8, says Dubey. He concludes for the majority of the FMCG companies palm/edible oil is a raw material but Manorama Industries is directly linked to the scheme being an edible oil producer.

Amid this news, the stock surged around 6 per cent to Rs 1620 per share on the BSE intraday trade today. At around 12:30 pm, the stock was trading over 1 per cent higher to Rs 1545.4 per share on the BSE, as compared to a 0.37 per cent decline in the S&P BSE Sensex on Friday.