Given the rising competition and slower-than-expected industry demand recovery, Motilal Oswal expects a slightly lower CAGR of ~14% for FY26-FY28E for Indigo Paints.
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Motilal Oswal Report
Indigo Paints Ltd.'s strategic shift toward non-metro towns, along with increased investments in distribution and influencers as part of its Strategy 2.0, is proving to be a successful endeavor. That said, the company continues to focus on the premium and emulsion segments, with a deliberate shift away from the economy segment.
The company expects revenue growth of 15%-20% in FY27, as demand is expected to recover after witnessing weakness over the last two years.
Given the rising competition and slower-than-expected industry demand recovery, Motilal Oswal models a slightly lower CAGR of ~14% for FY26-FY28E.
With milder raw material prices and improved growth leverage, the brokerage projects Ebitda margins for FY27 and FY28 at ~18-19%.
The brokerage expects Ebitda/PAT CAGR of 16%/18% over FY26-28E, and reiterates Buy rating with a revised target price of Rs1,450 (premised on 35x Dec'27E earnings per share).
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