Buy Indigo Paints; target of Rs 1350: Motilal Oswal

Motilal Oswal's research report on Indigo Paints

Indigo Paints (INDIGOPN)’s standalone sales were flat YoY in 4QFY25 due to consistent demand headwinds. The paint industry saw a 1% YoY decline in 4Q. Apple Chemie (subsidiary) sales grew 8% YoY. Consolidated sales inched up 1% YoY to INR3.9b (in line). The putty and cement paint segment’s value/volume declined 8%/10%. Emulsions saw volume decline of 2.5% and value growth of 1%, indicating a shift toward premium products and an improved product mix. Enamel and wood coatings’ volume/value grew 8%/11% YoY. Primer and distempers posted a volume growth of 2% and a value growth of 6% in 4QFY25.

Outlook

We reiterate our BUY rating with a TP of INR1,350 (based on 35x Mar’27 P/E), considering its growth outperformance, synergies with Apple Chemie, consistent capacity and distribution expansion, and its favorable valuation multiples vs. peers.

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