Sharekhan's research report on Indigo Paints
Indigo Paints Limited’s (IPL’s) Q2FY2025 numbers were in line with expectations; consolidated revenues grew 7.4% y-o-y, OPM fell 124 bps y-o-y to 13.9% and PAT declined 12.1% y-o-y. Management expects demand to improve in Q3 on seasonality (festive and wedding driven demand) and pent-up demand. It eyes at least double-digit revenue growth in H2.Margin contraction in Q2 was mainly due to price cuts undertaken in H2FY24. Management expects margins to bounce back in H2 and end FY2025 with slightly higher margins y-o-y.
Outlook
Stock trades at 48x/38x/32x its FY25E/FY26E/FY27E earnings, respectively. We maintain Buy rating with a revised PT of Rs. 1,819.
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