Buy Indigo Paints; target of Rs 2250: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on Indigo Paints

Indigo Paints Limited (IPL) posted strong numbers amid high input cost inflation. Revenue grew 44% y-o-y (3-years CAGR stood at 17%) and OPM improved 283 bps y-o-y to 15.7%. PAT grew 72% y-o-y to Rs. 20 crore. Change in strategy of improving reach/output per dealer in Tier 1 and Tier 2 towns is seeing some green shoots. Incremental revenues from strategy changes would start flowing in from Q3FY2023. Key input prices (including emulsion monomers, titanium oxide & packaging material) have corrected from highs and company will continue to see sequential improvement in the gross margins in the coming quarters.

Outlook

Stock trades at 48.1x and 34.7x its FY2023E and FY2024E earnings. We maintain Buy with an unchanged PT of Rs. 2,250.

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Indigo Paints - 080822 - khan