Buy Indigo Paints; target of Rs 1770: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Indigo Paints

Indigo Paints (INDIGOPN) delivered a sales growth of 15% YoY,surpassing the industry average. This can be attributed to their lower base compared to competitors, coupled with superior execution of their strategies. The company isfocused on the installation of tinting machine in Tier 1 and 2 cities and is also ramping up its sales force. The GP and EBITDA margin expanded YoY, but declined sequentially, due to the higher growth in the economy category compared to the premium segment. The premium category, primarily consisting of exterior paints, was adversely affected by the monsoon season, impacting its performance. The management witnessed exceptionally good sales in Oct’23 and anticipates this positive momentum to continue. The margin is expected to pick up significantly in subsequent quarters on better product mix. The company exhibited growth across all geographies in India, demonstrating a reduced reliance on Kerala. Furthermore, Apple Chemie has successfully expanded its operations beyond Maharashtra.

Outlook

We reiterate our BUY rating with revised TP of INR1,770 (40x Mar’25E EPS).

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Indigo Paints - 05 - 10-2023 - moti