Target: ₹1,350
CMP: ₹965.25
Indigo Paints’ consolidated revenues grew by 4.7 per cent yoy to ₹359 crore, driven by 3.5 per cent growth in the standalone business to ₹339 crore and 31.5 per cent growth in Apple Chemie (subsidiary) to ₹20 crore. Lower sales in Oct-25 (affected by early diwali and extended monsoon) affected revenues.
Emulsions reported 3.4 per cent volume decline and 0.2 per cent value growth. Enamels and wood coatings posted volume/value growth of 20.2/18.9 per cent, respectively. Putty and cement paints grew by 2.1 per cent in volume and 5.5 per cent in value terms. Primers, distemper and others delivered 7.4/12.5 per cent volume/volume growth, respectively.
Gross margins were stable at 46.8 per cent supported by lower raw material prices and better mix, while OPM rose by 236 bps to 19 per cent, aided by lower A&P spends (at 5.6 per cent A&P spends were 260 bps lower yoy).
A gradual recovery in the paints industry, widening presence across markets and capacity additions will aid revenue growth, while stable/lower raw material prices will support profitability in the near-medium term. We expect IPL to clock revenue and PAT CAGR of 9 per cent and 11 per cent, respectively, over FY25-FY28E. Stock trades at 30x/27x/24x its FY26E/FY27E/FY28E earnings, respectively. We maintain a Buy rating with a revised PT of ₹1,350.
Key risks: Higher competitive pressure or increase in key input prices are key risks to our earnings estimates.
Published on February 19, 2026