Indigo Paints is looking to shed its conservative approach and prioritise growth over profitability, marking a significant shift for a company known for protecting its industry-leading margins.
The paintmaker is prepared to give up some profitability to accelerate market share gains, even as it sees competitive intensity easing in the Indian paints market, managing director Hemant Jalan said during the company’s FY26 analyst interaction in May.
“I think it was a collective decision of the Board that maybe we have been a bit conservative in the past, and we need to press the accelerator and spend a little more liberally, whether it is on trade, whether it is on influencers, etc. It may result in a drop in gross margin by 2-2.5 percentage points while still maintaining our leadership in the industry,” he said.
Jalan told analysts the company had begun questioning whether it was being too cautious in safeguarding margins that have topped the industry leader’s for five straight years, even though its Ebitda margin already ranks second-best despite Indigo’s smaller scale.
In FY26, while market leader reported a gross margin of 43.8% and an Ebitda margin of 18.8% in FY26, Indigo Paints maintained a higher gross margin of 46.9% and a comparable Ebitda margin of 18.1%, according to ICICI Securities earnings review reports.
The company plans to increase spending on trade schemes, influencer outreach, and other growth initiatives to strengthen its market presence, even if it means accepting lower margins in the near term. Indigo paints intends to use painters and contractors as influencers for a more authentic viewpoint.
The shift comes at a time when competition in the paints industry has intensified sharply, with both established players and new entrants fighting for market share. Companies are increasingly prioritising growth and scale over short-term margins as they seek to strengthen their position in a rapidly transforming market.
Increasing market share
Indigo is now joining that camp. The company becomes the latest paintmaker, after , JSW Dulux and Birla Opus, to openly signal that gaining market share is taking precedence over protecting profitability.
Elara Securities’ Amit Purohit said Indigo’s pivot to growth over margins is a timely move, given its margin cushion and the risk of losing further market share if it doesn’t act.
The war for market share in the paints industry began when the Aditya Birla Group entered the market in January 2024 through Birla Opus, with a ₹10,000-crore investment plan across six greenfield plants. Not far behind, JSW Paints, part of Sajjan Jindal’s JSW Group, turned aggressive last year with a ₹9,000-crore acquisition of Akzo Nobel India—signalling its intent to expand fast.
“We are in a phase where growing and gaining market share is the top priority,” Jalan said. “To pursue this with the urgency it warrants, we are prepared to accept some moderation in our gross margins if required.”
For now, the pecking order starts with Asian Paints, the market leader, followed by Berger Paints, Kansai Nerolac, JSW Dulux, Birla Opus, and Indigo Paints.
Indigo’s market share in the decorative paints segment is 2-3%.
Indigo’s confidence stems partly from the investments it has already made in manufacturing capacity and distribution. The company is commissioning a new water-based paint plant in Jodhpur and does not expect any major capital expenditure requirements until FY29. With capacity expansion largely complete, management believes the business can now focus on scaling up revenues and converting growth into stronger cash flows.
The strategy also reflects management’s view that the company has room to grow much faster than the industry. Indigo currently holds only a small share of India’s market, giving it ample scope to win customers from larger rivals.
“It is much more important to jump into a much higher top-line growth trajectory,” Jalan said. “We are going to be far more aggressive in pursuing top-line growth.”
Growth capacity, not competition, fuels shift
Importantly, management insists the shift is not being driven by intensifying competition. According to Jalan, competition has actually moderated compared with a year ago, with pricing behaviour across the industry becoming more rational. Instead, the decision is rooted in an internal assessment that Indigo has not always capitalised fully on its growth opportunities.
“We just feel that we have not always grown the way we should be growing vis-a-vis the rest of the industry,” Jalan said. “We just feel that we should be pursuing that with a little more vigour rather than simply defending a percentage point or 2 on our bottom line.”
Shares of Indigo Paints, which debuted in 2021 at ₹3,117.15 apiece, have fallen to ₹1,007.95 apiece today. In FY26, Indigo Paints shares fell by almost 27% while the benchmark Nifty fell by almost 4%.
The Pune-based paintmaker ended last fiscal with an almost 5% jump in revenue to ₹1,405 crore and 4% jump in net profit to ₹147 crore.