🖌️ At a Glance
Indigo Paints made a splash as the quirky, category-creating disruptor in India’s decorative paints market. With metallic emulsions and tile coats, they painted themselves into investor portfolios. But now? Growth’s slowing, margins are stable, and the canvas is getting crowded.
1. 🪄 Introduction with Hook
Remember the IPO hype?
Indigo Paints was the shiny new tin in a room full of boring beige brands.
It sold metallic emulsions, marketed through MS Dhoni, and promised to unseat the Goliaths.
But after a stock fall from ₹1,720 to ₹1,200 — the question now is:
“Was it paint… or just primer?”
2. 🏭 Business Model (WTF Do They Even Do?)
Decorative Paints — that’s it. But they claim to be the most creative in it.
🎯 Segments:
- Emulsions (including Metallic, Tile Coat, Floor Coat)
- Enamels
- Primers
- Putties
🖼️ USP?
- “First movers” in niche decorative categories
- 80–90% market share in products like tile coat paints
🧪 Recent acquisition: 51% stake in Apple Chemie, a concrete admixtures business — likely for backward integration and diversification.
3. 💹 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 1,073 | 1,255 | 1,277 |
| Net Profit (₹ Cr) | 132 | 149 | 144 |
| OPM | 17% | 19% | 18% |
| ROE | 22% | 23% | 14.7% |
| EPS | ₹27.7 | ₹31.2 | ₹30.2 |
🪣 FY25 revenue growth: ~1.7% (basically, your wall dried faster)
4. 📊 Valuation – Is It Cheap, Meh, or Crack?
- P/E: 40x
- P/BV: 5.45x
- Market Cap: ₹5,717 Cr
- Fair Value Estimate: ₹880 – ₹1,050
Based on 28–33x FY26E EPS of ₹31–₹35
It’s a decent midcap paint story — but no longer the “growth ka champion” it IPO’ed as.
5. 🧨 What’s Cooking – News, Triggers, Drama
🏭 Capex:
- Pudukkottai and Jodhpur plant expansions done
- CWIP of ₹135 Cr still ongoing
💰 M&A:
- Acquired Apple Chemie in April 2023 (51% stake)
📉 Growth slowdown:
- TTM revenue growth: 2%
- PAT growth: Negative 3% YoY in FY25
6. 💾 Balance Sheet – How Much Debt, How Many Dreams?
| FY | Net Worth (₹ Cr) | Debt (₹ Cr) | D/E |
|---|---|---|---|
| FY21 | ₹516 | ₹9 | 0.01x |
| FY24 | ₹867 | ₹17 | 0.02x |
| FY25 | ₹1,000 | ₹20 | 0.02x ✅ |
🎯 Almost debt-free.
🧮 Fixed Assets + CWIP = ₹691 Cr → Infra is ready, but volumes are lagging.
7. 💸 Cash Flow – Sab Number Game Hai
| Year | CFO | Capex | FCF |
|---|---|---|---|
| FY24 | ₹152 Cr | ₹143 Cr | ₹9 Cr |
| FY25 | ₹205 Cr | ₹175 Cr | ₹30 Cr |
Positive FCF ✅
But high capex with muted sales is not what you expect from a “growth stock.”
8. 📊 Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 22% | 23% | 19.5% |
| ROE | 22% | 23% | 14.7% |
| Working Capital Days | 27 | 39 | 99 😬 |
| CCC | 18 | 29 | 54 |
🧯 Working capital pain in FY25 is visible
🛠️ Inventory bloat post new plant launches?
9. 📈 P&L Breakdown – Show Me the Money
Q4 FY25:
- Revenue: ₹367 Cr (↑0.3% YoY)
- Net Profit: ₹57 Cr (↑6.3% YoY)
- OPM: 23% (👏 Best in last 3 years)
- EPS: ₹11.95 (QoQ up from ₹7.65)
But…
📉 FY25 full-year sales = FLAT
📉 PAT YoY = -3%
10. 🧑🤝🧑 Peer Comparison – Who Else in the Game?
| Company | OPM | ROCE | P/E | ROE | CMP/BV |
|---|---|---|---|---|---|
| Indigo | 18% | 19.5% | 40x | 14.7% | 5.45x |
| Asian Paints | 17.7% | 25.7% | 60x | 20.6% | 12.1x |
| Berger | 16.1% | 25.1% | 57x | 20.5% | 11x |
| Kansai | 12.1% | 13% | 34x | 9.8% | 3.14x |
| Akzo Nobel | 15.7% | 41.7% | 38x | 32.2% | 12.3x |
👀 Indigo has decent margins, but lower capital efficiency
💸 Valuation discount to Asian Paints = deserved.
11. 🧾 Shareholding, Promoters & Ownership Mix
| Category | Mar 2025 |
|---|---|
| Promoters | 53.93% |
| FIIs | 12.41% |
| DIIs | 16.74% |
| Public | 16.93% |
🔼 DII stake jumped from 1% → 17% in last 1 year
📉 FII holding flat, promoter stake steady
🧪 Institutional interest growing, but performance needs to justify it
12. 🧑⚖️ EduInvesting Verdict™
“Category creator, but now growth spectator.”
Indigo Paints built a cult. Then came Asian Paints, Berger, JSW Paints, and 10 more influencers shouting on Instagram Reels.
Now, with plants done, working capital stretched, and revenue stuck — it’s time to deliver.
Until then…
🎨 It’s more “interior decor” than “portfolio core.”
🎯 Fair Value Estimate: ₹880 – ₹1,050
Based on 28–33x FY26E EPS of ₹31–₹35
✍️ Written by Prashant | 📅 11 July 2025
Tags: Indigo Paints, Decorative Paints, Asian Paints, IPO Stocks, Paint Sector, Smallcap Consumer, OPM Growth, Capex Story, Paint Valuations, Sector Comparison
