Target: ₹1,250
CMP: ₹1,067
Indigo Paints has built its brand around innovative and differentiated products across decorative paints, premium emulsions, waterproofing solutions and construction chemicals. The company derives roughly 30 per cent of its revenue from differentiated products which continue to support superior pricing power and industry-leading gross margins.
Management highlighted that the growing contribution from these products helped mitigate raw material inflation and sustain profitability during Q4-FY26
Indigo Paints is completing a major expansion cycle at its Jodhpur facility. The company has already commenced production at the new solvent-based paint plant (12,000 KLPA) and the expanded putty facility, while the 90,000 KLPA water-based paint plant is in the final stages of commissioning.
Once operational, these facilities will significantly enhance the company’s ability to cater to demand across Northern, Eastern and Central India, while supporting growth in both premium and economy paint categories.
Indigo Paints delivered decent performance in Q4-FY26 with consolidated Revenue/EBITDA/PAT growing 9.7/10.3/3.1 per cent y-o-y to ₹425 crore/ ₹96 crore/ ₹59 crore respectively.
At CMP, the stock trades at FY27E/FY28E Bloomberg consensus PE of 30.3x/26.1x respectively which looks reasonable.
Key Risks: High competition; volatility in key raw material prices; demand slowdown