Sharekhan's research report on Indigo Paints
Indigo paints Limited (IPL) posted good performance in Q1FY2024, with revenue and PAT growth at 23.7% and 58.2% y-o-y to Rs. 277 crore and Rs. 31.5 crore, respectively; OPM improved by 155 bps y-o-y. The company is targeting Rs. 200 crore revenue from the newly acquired Apple Chemie in three years; contribution from tier-1/2 cities is expected to rise to ~38% by FY2024-end from 33% in FY2023. Margin expansion would be led by softening of input costs and reduction in ad-spends as a percentage of sales. We expect the company’s revenue and PAT to report a 22% and 23% CAGR over FY2023-FY2025E, respectively, led by double-digit volume growth, driven by distribution expansion, focus on brand building, capacity addition, and scale-up in the B2B business.
Outlook
The stock trades at 44.6x/37.7x its FY2024E/FY2025E earnings. We maintain our Buy rating with a revised PT of Rs. 1,850.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
