On Episode 1025 of The Core Report, financial journalist Govindraj Ethiraj talks to Dr Rahul Mirchandani, Chairman & Managing Director at Aries Agro Limited as well as Manisha Kapoor, CEO and Secretary General at Advertising Standards Council of India (ASCI).

SHOW NOTES

(00:00) Stories of the Day

(01:00) Will Markets Disconnect From Crude Oil Prices?

(02:39) Sensex Is Up Near 4,000 Points In 5 Days

(03:11) Gold Demand Is Falling Sharply In India

(04:51) Sulphur Supply Has Improved But Prices Are Still High

(11:11) Indian Data Centres Could See A 5x Jump In Capacity In Next Four Years Driven By Rs 3,00,000 Crore Of Investments

(12:35) Some 60 Of 61 Nutraceutical Company Ads Processed By Ad Body Did Not Hold Up To Their Claims

—

NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.

Good morning, it's Wednesday, the 4th of November and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.

Our top stories and themes…

Are the markets disconnecting from crude oil prices?

The Sensex is up 4000 points almost in five days.

Sulphur supply has improved but prices are still high. What does it mean?

Some 60 of 61 nutraceutical company ads processed by an ad body did not hold up to their claims.

Gold demand is falling sharply in India

And data centres in the country could see a 5x jump in capacity in the next four years driven by 300,000 crores of investments.

Markets, Oil, Gold and Bata

In the last five days, the Sensex has risen almost 4000 points or 3956 points to be precise. This is the first time in several months that the benchmark indices have diverged from oil prices which of course continue to rule high. Until now, it's been a fairly consistent inverse relationship between rising oil prices and falling indices.

Will it last? Well, we don't know but a good earning season so far, some AI unwinding in global markets and the prospects of a long-term capital gains tax for foreign investors being eased or maybe even removed has injected some life into the markets. Of course, there is no guarantee that will happen even if the government is sending positive signals to that effect. What will matter is whether the tax goes away fully or some diluted version takes its place which is quite likely and of course the other question is when will all of this happen.

The union budget will be presented around the 1st of February 2027 which is still three months away and of course can be an eternity in present times. As we said, crude oil volatility is not having its customary impact prices rose on Tuesday even as Reuters reported Iranian officials saying a deal to the end of the war was far off while the United States struck or rather bombed Iran's Qeshm island. Brent crude futures were up a little under $2 a barrel to $106.60 so just under $107 a barrel on Tuesday morning.

All markets are now awaiting the outcome of the U.S. midterm elections scheduled for today. It is not clear whether the outcome will impact some of the specific geopolitical moves of the current U.S. administration which of course has affected many parts of the world including India but there is some expectation that things could be relatively measured if the better than the republicans overall. With all of this in the backdrop, the benchmark indices were higher.

For the fourth day, the centex rose 1,225 points to close at 76,917 and the nifty 50 was up 370 points to close at 23,810. In the broader markets, the nifty mid-cap 100 and small cap 100 were up 1.06 and 0.3 percent each. The rupee was also slightly stronger on Tuesday and closed at Rs.

94.74 per dollar up from its previous close of Rs. 94.90 per dollar in the previous session. Elsewhere, gold demand in India is expected to fall to a six-year low in 2026 thanks to higher prices putting pressure on jewellery sales and investment demand.

The world gold council said on Tuesday jewellery demand fell in the first nine months of the year which will bring down total demand to around 650 metric tonnes, the lowest since 2020 when the COVID-19 pandemic forced jewellery shops to close. World gold council officials told Reuters gold demand fell about 29 percent year-on-year to about 162 tonnes in the September quarter after jewellery purchases fell 20 percent and investment demand fell 40 percent. The council believes demand could pick up in the December quarter as key festivals like Deepavali and the wedding season of course drive purchases.

Meanwhile Bloomberg also quoted a world gold council report saying India's illegal gold imports surged to the highest since 2023 in the third quarter thanks to higher import duties. Informal shipments as they've called it for July to September jumped more than 1500 percent to 50 tonnes from three tonnes a year earlier. The producer funded group said citing data from consultancy metals focus.

The Bloomberg report said that this report gave no details on how the trade is tracked. On Tuesday prices were down slightly after gaining two percent in the previous session. Spot gold was at about $3,903 per ounce on Tuesday afternoon.

We refer to strong second quarter earnings earlier and many results have come out. Even shoe companies have done better. Footwear chain Bata India reported a 30 percent rise in second quarter profits on Tuesday thanks to a strong demand for its premium shoes and sneakers.

Its primary brands are Hushpuppies and Northstar.

Sulphur Supply Has Improved But Prices Are Still High

High sulphur prices have eased off record levels seen a few months ago but continue to put pressure on India's fertiliser sector raising production costs for diammonium phosphate or DAP, single superphosphate, SSP and complex fertilisers. Now sulphur is a key ingredient for fertiliser manufacturing and a majority of it comes from the oil and gas refining process.

Sulphur is first converted into sulphuric acid which is then used to process rock phosphate into phosphoric acid and subsequently into DAP and other phosphatic fertilisers. Sulphuric acid is also directly used in the manufacturing of single superphosphate fertilisers. High fertiliser prices impact the government subsidy burden particularly if they stay high for a long period.

Landed sulphur prices in India had almost doubled since January to over $1,000 a tonne but eased off right now. In May, China halted exports of sulphuric acid from that country hitting metals and fertiliser industries already struggling because of raw material bottlenecks thanks to the war in West Asia. So while supply has been a problem too in the past, right now the challenge is more to do with prices.

India is the world's second largest user and the third largest producer of fertilisers and imports more than half its sulphur requirements. I reached out to Rahul Mirchandani, Chairman and Managing Director of Aries Agro which makes specialised agricultural and nutritional products for plants, animals, and aquaculture and I began by asking him how he was seeing overall price trends right now and their impact on the agro industry.

INTERVIEW TRANSCRIPT

Dr. Rahul Mirchandani: As far as Sulphur is concerned, I believe the entire supply chain crisis has now passed because there is no longer a supply problem from the production side. There is a supply problem now more from the logistics side. I think production is adequate in most places. However, the entire supply chain and logistics bottlenecks are what is now restricting supply in the market.

So that is our current reading of the scenario. The logistics costs are also going completely through the roof. So what we're hoping is that that will ease up in the next 30 to 60 days.

But as of now, there is no production problem. It's more of a delivery problem.

Govindraj Ethiraj: Got it. And for India, how much are we importing right now versus how much are we producing domestically?

Dr. Rahul Mirchandani: In terms of India's concern, India has been a net importer of sulphur. We are producing in some of our refineries. But I think as of now, our supply is greater than demand.

So we are in a situation where there is adequate amount of supply available, both domestic and international. We are currently at about $860, $880 a tonne, which is kind of where we are at the moment. It has eased about $10 to $15 in the last one week itself, which does show that there is adequate supply in the market.

But we do hope that with the winter season picking up, that demand will also increase. And then you will be able to get some sort of equilibrium. As of now, I think the rates are easing up.

We are in the $860, $880 a tonne range as far as India is concerned. However, I have noticed that in the Middle Eastern market, the rates are reducing fairly sharply. And that will therefore have a lead impact on India in the next one or two weeks.

Govindraj Ethiraj: Right. But these prices at $860, as you said, dollars per tonne, is still much higher than what the average has been in the recent years, isn't it?

Dr. Rahul Mirchandani: Well, actually, the average had got completely screwed. Sulphur went beyond a thousand not too long ago. In the not too long ago, it was also at $250.

I think both these scenarios are where there has been a sudden spike in rates and then there's a sudden easing up right now, which is not happening as fast as the rates went up. So the rates went up very high when the Hormuz crisis broke out. As of now, they are on the way down, but they are not going to reduce as fast as they increased, simply because winter season also typically has a higher sulphur requirement for heating, also for agriculture.

Also, I'm told that there are some new projects that are going to increase demand for sulphur in the near term. So nickel, for instance, is a massive nickel facility coming up in Indonesia, which will need about 800,000 tonnes of sulphur. This again will basically mean that there's going to be an adequate amount of sulphur required in those areas as well.

So the easing of prices won't happen as quickly as the rates went up.

Govindraj Ethiraj: Right. And could you tell us about where things stand in the context of agriculture, particularly fertilisers?

Dr. Rahul Mirchandani: In the case of fertilisers, I think supply of sulphur, both for the sulphur bentonite, also for elemental sulphur, also for sulphur for sulphuric acid. These are the three big areas. There has been, right now, adequate supply.

Rates have not eased up so far. The sulphur bentonite as well. Sulphuric acid has been a big driver in terms of, you know, sulphur fertiliser pricing.

What we hope is for the next ruby season, the winter season at least, we don't expect that there will be a significant reduction beyond maybe a slight correction of about 5 to 10 percent. So winter season, we still continue to have a high cost kind of scenario. Maybe 2027 onwards, we hope that the sulphuric acid rates will ease up further.

But sulphuric acid as well as the sulphur rates have kind of been the big drivers of fertiliser pricing and they are not necessarily going to ease up very soon.

Govindraj Ethiraj: Right. How are you seeing capacities including in India in the next year or two or the next couple of years? Do you see more capacities coming up?

And to what extent would we continue to depend, let's say, on China?

Dr. Rahul Mirchandani: As far as capacities are concerned, it's going to take an adequate amount of capacities to be built. I think our refineries are ramping up. Whether it's Reliance, whether it's Indian Oil, there are refining capacities that are increasing.

But our requirement for sulphur is much more than what we are able to produce. So I think we are going to be reliant for sulphur in the not too distant future, at least on imports. I think the Chinese imports are being well sort of balanced with Middle Eastern imports.

I believe that Middle East imports are going to get significantly cheaper very soon. Like I said, there is already a softening happening. I think in the next one week, we expect the Qatar pricing to come down very sharply.

Now, if Qatar leads the way, one of those countries actually leads a sharp $50-$100 decrease in sulphur, then they will be the market drivers, not necessarily China. So we do expect that we will be dependent. Yes, our refineries are increasing our capacities for sulphur output, but we will still be fairly dependent on imports for the not too distant future.

Govindraj Ethiraj: Rahul, thank you so much for joining me.

Dr. Rahul Mirchandani: Thank you.

Indian Data Centres Could See A 5x Jump In Capacity In Next Four Years

India's data centre industry is entering an investment super cycle with installed capacity expected to rise five times to about seven and a half gigawatts by March 2030 and attracting investments of more than 300,000 crore rupees over the four fiscals.

From a credit perspective, the sector's profile will be shaped by the interplay between strong contracted cash flows and front-loaded leverage arising from large upfront capital expenditure. It also says that debt levels are expected to remain elevated over the medium term because investments typically precede cash generation by 24 to 36 months. Nevertheless, as projects are commissioned and utilisation ramps up, strong cash flows could support a gradual improvement in leverage.

It also says that overall contracted revenues provide a strong anchor for credit stability but the unprecedented scale of capacity addition brings execution into sharper focus. Now this of course is something that we are seeing in many other parts of the world including in the United States. The report also says that demand visibility is strong for an industry undertaking such a capital intensive expansion and nearly half of the upcoming capacity is already committed under long-term contracts limiting speculative development and reducing offtake risk.

ASCI Identifies Dubious Claims in Nutraceutical Ads

60 of 61 advertisements for nutraceutical products evaluated by the Advertising Standards Council of India or ASCI were found in violation of the ASCI code. Of these, 29 ads were not even contested while 31 advertisers who contested the objections failed to provide adequate substantiation for claims made in their advertisements, ASCI has said. Of the 61 advertisements evaluated, one case is currently under process so we do not know where it stands whereas in the case of all the other 60 advertisements, the processing is complete.

The main violations relate to claims around weight management, anti-ageing, skin lightening, UV protection, and respiratory health. The report titled A Pill for Thought, Review of Health and Wellness Claims in Nutraceutical Advertising also flagged advertisements claiming to address conditions such as asthma, chronic obstructive pulmonary disease or COPD, blood pressure, cholesterol, and PCOS or polycystic ovary syndrome, highlighting how exaggerated outcomes and misleading visuals could create unrealistic expectations and blur the distinction between general wellness support and medical treatment, according to ASCI. The interesting thing is that India's nutraceutical market according to Grandview Research quoted by ASCI is worth about $39 billion as of last year which is not too far from India's pharmaceutical industry market which is somewhere between $50 and $60 billion.

I reached out to Manisha Kapoor, CEO and Secretary General of ASCI and I began by asking her that with so many nutraceutical companies claiming something that they were not able to deliver, what were these key claims and whether this was something that was out of whack even compared to other sectors or industries that they studied.

INTERVIEW TRANSCRIPT

Manisha Kapoor: Well, it is, I guess, out of the whack in the sense that because this is in the health space, you know, any claim that is made in the sector has to be taken more seriously. Now, we've seen claims starting from slimming and, you know, kind of promising weight loss and slimming from within, all of those kind of things. We found a lot of complaints around those.

We've also found complaints around the beauty promises. So, you know, in terms of reversing signs of ageing or, you know, making your skin feel younger, you know, visible results in terms of skin marks, etc. But then it also goes into more serious claims like, you know, lung cleansing.

So, you know, it's talking about how internal organs can be impacted positively by nutraceuticals and some claims which, you know, are kind of pushing the boundary into disease cure, you know. So, for example, you know, you can reverse PCOD, things like that, which are, you know, these require medical protocols, these require, you know, investigations into what consumers are, you know, what their kind of biometrics are or what their kind of, you know, health is. And it's also not one solution for every consumer.

So, I think that's the worry in terms of, you know, being promising, you know, these quick fixes, particularly in the area of health. And we see that many of these start with possibly some ingredient, you know, which is, let's say, within literature is known to be beneficial for a particular cause or condition or, you know, let's say, in terms of having skin benefits. But, you know, there is no study that demonstrates that the inclusion of that ingredient in the quantity that it is in a formulation, which is the eventual product, has actually any impact at all.

So, I think that's really where the missing link is. And, you know, it's a significant gap.

Govindraj Ethiraj: Right. And you also say that 29 of these advertisements of the 60 were not contested and the 31 who did fail to provide adequate substantiation. My question is a little different.

So, typically, you deal with well-known brands, or known companies or companies who've been around to make a claim, you take it up with them, and they correct it. And there is someone who you know, perhaps, or have dealt with. Is that the same case with these companies?

Are these companies that are known? Or have you encountered them in the past as an organisation?

Manisha Kapoor: So, one is, I think we look at claims, not just in nutraceuticals, but across the sectors, across a width of advertisers, particularly with digital monitoring, we see a lot of even small local regional advertisers with the whole D2C first approach kind of thing. So, over the last few years, as digital has become a bigger part of our monitoring, we are in fact seeing many advertisers who we are encountering for the first time. So, relatively new advertisers, recently possibly funded, etc.

So, I would say it's a mixed bag, some are a little bit more established, but we are seeing a lot of very new players as well. So, I think that's a trend, not just in this study, but also across all our monitoring work.

Govindraj Ethiraj: Right. And what's the next step? What happens here on?

Manisha Kapoor: So, essentially, we write to the advertisers, you know, once the jury has kind of examined their evidence and found them wanting, you know, we write to them to modify or withdraw their ad. And in some cases, we would receive a compliance. Now, some of these cases are recent, so that process is still kind of going on.

And in some cases where we do not receive compliance, we escalate these cases to the regulator. So, in this case, nutraceuticals is under FSSAI, so it could be FSSAI, it could be FDA, it could be people who are looking at the Drugs and Cosmetics Act. So, it will be a mix of cases depending on what is the product category.

You know, we kind of find who the appropriate regulator would be to take this up further. And then the regulator can examine this case, we provide all the details, they can then, you know, decide whether this case also violates their laws. And accordingly, you know, do the adjudication, do the penalising, you know, all of those powers rest with the statutory regulators.

Govindraj Ethiraj: Right.And you said there's a jury, which is in all categories. But in this case, what does the jury comprise?

Manisha Kapoor: So, we have a jury which looks at all our cases. It's an independent jury, which is constituted by ASCI, but does not report into ASCI. And it has members both from the industry as well as out of the industry.

So, you know, what we broadly call civil society. So, it has consumer activists, it may have doctors, lawyers, professors, and people from different walks of life, you know, well known in their own fields, but not connected with the advertising and marketing industry. Now, in any jury composition, the industry members are in a minority and civil society members are in majority.

Secondly, any industry member that is from this industry, you know, therefore, will have a conflict in these cases is not part of any jury that is looking at the sector. So, you know, jury members who have conflict have to recuse themselves, which is either they are in the industry, it's either their brand, or it's a competitor's brand. So, they have to recuse themselves.

Govindraj Ethiraj: Right, a question that's pertinent here, as well as in a larger context, digital advertisements. Again, in traditional media platforms, like television, print, you're able to reach out to someone and crack down and there are regulatory bodies above them, or self regulatory bodies above them. How does it work in the case of digital advertising?

Manisha Kapoor: So, digital advertising, while it does not have a very specific oversight today, in the sense that it does, you know, the primary jurisdiction for digital advertising actually rests with the Ministry of Information and Broadcasting, but they don't have a specific law or a code that actually governs it. So, that's a bit of a gap. But we do have sector regulators, as well as the CCPA, which requires ads not to be misleading, which are, you know, so that's a more horizontal kind of act, which applies to even these cases.

And then you have sector regulators. So, you have, let's say FSSAI, which also looks at nutraceuticals, you have the Food and Drug Authority, which also gives out licences and approves claims. So, there are a set of other regulators who can look at these cases.

So, while, you know, there is no horizontal act across digital media, and that is a gap. So, you know, undoubtedly, you know, that's a gap that needs to be filled by an appropriate regulation or a code, you know, and therefore, what that does is it helps to keep all parties accountable. It's whether it's the advertiser, whether it's the media platforms that are carrying it, it kind of, you know, keeps all those people in the ecosystem accountable and different kind of jurisdictions cover it from different aspects.

Govindraj Ethiraj: Got it. Manisha, thank you so much for joining me.

Manisha Kapoor: Thanks, Govind.