Asian Paints, India’s biggest paint maker by market value, has caught the eye of anti-monopoly watchdog the Competition Commission of India (CCI) for alleged abuse of the dominant position in certain southern territories.
The CCI has ordered an investigation on a complaint filed by JSW Paints, a unit of the Sajjan Jindal-owned JSW Group.
A bench headed by CCI chairman Ashok Kumar Gupta has ordered an inquiry to ascertain a prima facie case to determine whether the same has resulted in contravention of the provisions of the act.
JSW Paints has alleged that after it launched its products in Karnataka, Tamil Nadu, Telangana markets and started partnering dealers and distributors, Asian Paints started taking coercive action that violated provisions of competition law.
Asian Paints has the highest market share based on all parameters including revenue, Ebitda, and installed capacity.
Its key Products/Revenue Segments include Paints, Enamels, Varnishes & Black which contributed Rs 16196.87 Crore to Sales Value (98.81% of Total Sales), Other Operating Revenue which contributed Rs 182.34 Crore to Sales Value (1.11% of Total Sales) and Sale of services which contributed Rs 12.57 Crore to Sales Value (0.07% of Total Sales) for the year ending Mar 2019.
For the quarter ended 30-09-2019, the company has reported a Consolidated sales of Rs 5050.66 Crore, down 1.56% from last quarter
Sales of Rs 5130.63 Crore and up 9.43% from last year same quarter Sales of Rs 4615.49 Crore
The company has reported net profit after tax of Rs 826.76 Crore in the latest quarter.
We believe this news flow to not have any significant negative impact on the Asian Paints stock and action will be dependent on the Q3 FY20 numbers which are awaited.
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