Asian Paints Under CCI Scanner for Alleged Anti-Competitive Practices:-
Discuss some important companies and some important updates related to them The name of the first company is Asian Paints LED. Disclaimer that all the company related news and updates that we will cover are only for learning and only for educational purpose, do not consider this as any kind of investment advice, you can also do your own research and analysis. About Asian Paints, then this company was seen to be in a lot of focus today. The biggest reason for being in focus is that yesterday we heard some important news related to the company.
Allegations by Grasim Industries (Birla Opus):-
Due to this news, Asian Paints may have to face disturbance. Now are all those things exactly there? So let us talk about that. Considering the anti-competitive behaviour, a complaint has been filed against Asian Paints under CCI i.e. Competition Commission of India. And because of all these things, you saw weak performance of Asian Paints in the morning session today. After that recovery was seen. Now, if you see, CCI has ordered the DG i.e. the Director General to investigate the allegation of market dominance on Asian Paints.Look, a law is made in which it is written that any player can grow in any market. If we about a particular market. As an example, about the paint sector. Who is the biggest player in this sector? Asian Paints does not have any right to stop any other player from becoming bigger than itself or to not allow any other player to become bigger than itself. Now look, the law says that any player can expand himself in any market and can become big, that is, he can grow, and if anyone stops him, in fact if the dominant player stops him, then in that case it is a violation of the law. If the big player i.e. the dominant player is found guilty in the case then a lot of restrictions can be imposed. So these are all the things that we are getting to hear. We can say that there are allegations against Asian Paints regarding all these things. Gasim Industries has invested because recently they have launched Birla Opus Paints in the sector which is dominated by Asian Paints. So what did Birla OPS say exactly? So look, they have said that Asian Paints can say that they have imposed very restrictive clauses on their distributors. Due to which she is displeasing not to send the paint of Birla OPS. We can say this. And if we look at a lot of things from their side, we are hearing that Asian Paints is specially offering rewards with special discounts, which in a way, can be said to be the right thing to expand the business. But Asian Paints is targeting some other things. Like, if we talk about the credit limit, they have reduced it for their distributors and we can also talk about sales target and things related to reducing customer leads have been mentioned here. After this ultimately what Gasim Industries is saying is that Asian Paints wants to maintain its dominance and Asian Paints does not want to let Birl Ops come forward. So these are all the things we are getting to hear. On the basis of all these things, we are seeing complaints being filed against Asian Paints with CCI and we are also going to see an investigation on this. So overall you can note all these things. It is very important. But don’t consider this as a recommendation.
Paras Defence Secures ₹22 Crore Anti-Drone Tech Deal from French Firm:-
So the name of the next company is Paras Defence and Space Technologies. Now if we about this company, today you saw this company also being in focus quite strongly. What is the biggest reason to stay focused? We are hearing some important news and updates related to the company. Now, the biggest update here is that currently this company has got a contract or you can say an order has been received from the French company.
Contract Highlights:-
Now this is the order or contract, whatever you say. What is he exact about? So the contract for the Anti Drone Technology Unit has been awarded to Para Stephens here. Who gave it? French firm, that is, a French company. And its size is around ₹22 crores. Now look, you will get to see exactly all the details here. The company had updated the notice yesterday in which they said that they have received LOI i.e. Letter of Intent from Sarbair which is a French based company and they have to supply 30 units to it.
Impact on Business:-
Chira 200 Drone Counter Measure System whose size is Rs 22 crore 21 lakh. So overall this can be big news. If we look from the business point of view, if you are watching this news by analysing other defence companies, then you might feel that this news is not such a big news because the contract is only worth Rs 22 crore. But depending on the size of the company, we can decide whether the contract is big or small. If about the quarterly results of Paras DFC and the revenue of the last quarter, then the company had a revenue of 108 crores and if about profit, then the profit was 21 crores. So the company has got a bigger contract than the profit it gained in the last quarter. So for this reason we can call it big news and not small news. Due to this, we got to see good performance of the stock today. Now, friends, all these things, you definitely saw all these things today keeping the stock in focus. But if we talk about tomorrow, then tomorrow can be very important for Paras Defence because on 4th July the company has a board meeting, sorry not board meeting, on 4th July the company has kept the adjustment of split, that is, the record date of split has been kept as 1:2. Now tomorrow is not 4th July, tomorrow is 3rd July, so many people who would have created position in the company after seeing the split, they will try to square off their position and many people will try to create position in the company after seeing the split, so tomorrow you may see volatility in the company, keep this thing in mind, so if you are a shareholder of Paras Defence, then keep this thing in mind. Rest if you are not a shareholder you can ignore it. And all these things are just for educational purposes only, do not consider this as a recommendation.
Varun Beverages (VBL) in Spotlight After Goldman Sachs Buys Stake:-
So let us now talk about the next company whose name is VBL i.e. Varun Wedges LED. Currently VBL and many other companies are seen to be in focus because recently Goldman Sachs has acquired some stake in this company through a block.
Institutional Interest:-
So here you will see the name of many companies including VBL, HDFC Bank, Kinnes Technology, you will also see the name of Reliance here and names of companies like Airtel will also be visible and along with this you will also see the names of companies like HL. If we are talking about VVL, friends, we will only talk about VVL, approximately this much stake, not stake, sorry this much equity share has been bought by Goldman Sachs of VBL and we can say that its total size, if you take it approximately, is around Rs. 70 crores. So, we can say that we have seen a decent amount of block tail in VL through Goldman Sachs.
All Eyes on Q1 Results:-
About the upcoming quarter result of VBL, then it is going to be very important because the upcoming quarter result is Q1 and Q1 basically falls during summer and during summer, the business of this company moves to the next level. Last year only, you can see how massive spike you got to see on q & q basis and if you look at the year before that as well, there too we saw a massive spike on q & q basis and if you look at the year before that as well, the company’s numbers were seen growing tremendously on q & q basis, so every time we get to see good results of the company on q & q basis when we get to see the results of quarter one, but it will be very interesting to see how the result would be this time because if about quarter one, then basically it is summer time. But this time we have seen monsoon arriving before time in many states including Jharkhand and Bengal.So due to this, the company may have to face revenue losses region wise. Because recently we saw that due to the increasing market share of Reliance, the valuations of Weebly had corrected as it was expected that you might see Weebly’s numbers slowing down due to some reasons. Now the monsoon has already arrived here. Due to this, the upcoming results of Weebl will be seen in focus. So keep this thing in mind. But don’t consider this as a recommendation. All things are for learning only.