Introduction:
Indigo paints was founded in the year 2000 as a Company with single-point focus on a single product: cement paint. Today, It have grown to become one of the fastest-growing providers of decorative paints for interior and exterior uses. It’s growth is driven by innovation is fueled by passion for quality and environment-friendly solutions.
It’s portfolio consists of a range of high-end products, such as metallic emulsions, tile coat emulsions, bright ceiling coat emulsions and floor coat emulsions, amongst others. It has entered the construction chemicals and waterproofing business (WPCC) recently, through the acquisition of Apple Chemie India Pvt. Ltd.
Business Performance:
On a consolidated basis, Indigo Paints top line growth of 21.68% during the fiscal year FY24 well outpaced the low single digit industry average growth; and have recorded a total net revenue of Rupees 1,30,609 Lakhs. Its consolidated EBITDA for the year grew by 31.14% to  ₹ 23,807 Lakhs in FY24. This healthy performance is due to strategic initiatives, product innovations and strong brand equity empowering them to gain higher market share, even with moderate demand.
Product Diversity Of Indigo Paints:
Its portfolio of differentiated and innovative products have been a key driver of it’s growth, contributing disproportionately to it’s gross margin. As the first Company to introduce category-creator products such as Metallic Emulsions, Tile Coat Emulsions, Bright Ceiling Coat Emulsions and Floor Coat Emulsions in the Indian decorative paint market, It have established itself as industry pioneers. Furthermore, its basket of unique offerings, including Dirtproof and Waterproof Exterior Laminate, Exterior and Interior Acrylic Laminate and PU Super Gloss Enamel, has enabled them to provide value-added attributes, thus increasing it’s brand value and customer loyalty.
Industry Analysis:
India’s decorative as well as industrial paints and coatings market was worth USD 13,405.4 million during FY2024 and is estimated to grow to USD 31,706.3 million by FY2033 with a forecasted Compound Annual Growth Rate (CAGR) of 8.75%. India’s increasing population, coupled with the increasing pace of urbanisation are fuelling demand for paints and coatings across industry sectors. Government schemes like Smart Cities Mission and Housing for All, further stimulate construction activities, creating a significant opportunity for the pain and coating industry.
In addition, the automotive industry also supports this growth. With the increasing demand for automobile and growing after-sale services for different segments of cars, it is likely to support the demand for special paints and coatings. Conversely, the construction sector has experienced strong growth because of urbanisation, infrastructure development and government policies. Thus, industry has been serving as the primary catalyst increasing the demand for paints and coatings, particularly in architectural applications.
Additionally, with rising disposable incomes and changing lifestyle preferences, consumers are preferring aesthetically pleasing paints and durable coatings. Also there is huge competition due to the new entrant (BIRLA OPUS).
Fundamental Analysis:
In the last four years, the company’s sales have doubled while the profit has increased threefold. That means the company is growing.
| Year | 2020 | 2021 | 2022 | 2023 | 2024 |
| Sales | 625 | 723 | 906 | 1073 | 1255 |
| PAT | 48 | 71 | 84 | 132 | 149 |
Debt:
Total debt of this company is only 20 Cr. It is also a plus point.
Important ratio:
P/E of Indigo paints is 31.95 which is far less compared to industry P/E (38.11). ROCE and ROE are above 15%.
There is no pledged share.
Shareholding Pattern:
| PARTICIPANT | MAR 2021 | MAR 2022 | MAR 2023 | MAR 2024 | DEC 2024 |
| Promoters | 54.00% | 54.00% | 53.98% | 53.94% | 53.93% |
| FIIs | 10.67% | 8.94% | 8.80% | 7.73% | 12.50% |
| DIIs | 3.15% | 3.61% | 3.20% | 1.96% | 17.06% |
| Public | 32.18% | 33.46% | 33.99% | 36.37% | 16.52% |
- Big institutions are making positions gradually as you can see in the shareholding pattern.
Technical Analysis Of Indigo Paints:
The stock is trading at a very crucial support zone and all time low . At present, Price movement is sideways. If it breaks below the support zone, it will further correct up to 40%.
Conclusion:
At this time this company looks very attractive technically and fundamentally. Due to huge competition in the paint industry, the valuation of Indigo Paints is also looking good. It is evident from the shareholding pattern that big investors and institutions are making their position in it. Based on your risk , investors can make long positions using stop loss at 893.
Read More: What is High-Frequency Trading (HFT)?
