INDIGO PAINTS LIMITED
The domestic paint industry consisting of the decorative and industrial paint segment is estimated at ₹50,000 Crores.
Started in the year 2000 with the manufacture of lower-end Cement paints, Indigo Paints gradually expanded its range to cover most segments of water-based paints like Exterior Emulsions, Interior Emulsions, Distempers, Primers, etc.
Today the Company stands out as one of the strongest contenders in the Indian paint industry, being rated as an innovative paint manufacturer, which keeps coming out with unique products never before offered in the country.
They offer unique products like India’s first Metallic paint, which gives a unique look to your walls,
India’s first Floor Coat paint, which can withstand any vehicular traffic, Unique Ceiling Coat paint, for brighter and whiter ceilings and the First-of-its-kind Tile Coat paint for roofs, which gives an excellent glossy look.
The rise in urbanization, supported by demand for real estate and improved infrastructure, has increased the application of paint. India’s trajectory of urbanization has grown well from 25.6% in 1990 to 34.5% in 2019 and 34.9% in 2020 (estimated). The rise in urbanization, supported by demand for real estate and improved infrastructure, has increased paint application.
Asian Paints is the market leader in the Indian decorative paints category with a market share of 42%. Indigo Paints in the fifth largest decorative paint company in India, holding 2% of the total market share, in spite of being a comparatively newer player in the market.
Indigo Paints completed a successful IPO in Jan 2021, and was listed on Feb 2, 2021; the issue subscribed 117 times. The primary capital raised during IPO was ~Rs 300 cr.
As per it’s quarter four results, revenue growth, which was negative in first half of FY 2021 (due to April lockdowns), picked up to 22% growth in Q3, and 41% in Q4. There was an unprecedented increase in raw material prices during Q3 and Q4; they increased prices of paints in tranches between Nov-Mar to partially offset the effect. The Q3 gross margins managed to hold Itself, but a decline was visible in Gross Margins in Q4, due to continued spiralling of Raw material prices. EBITDA margins were unusually high in first half, due to negligible advertising during lockdown months; Q3 EBITDA was lower due to heavy advertising in festive season & IPL, followed by a more sustainable EBITDA margin in Q4.
We observe a significant increase in the assets of the company, which stands at 811.6 Cr compared to 421.95 Cr in the previous year. The EPS has been slightly lower compared to the previous year, this can be attributed to the pandemic. Overall the company’s results were up to the mark.
