Mirae Asset Sharekhan has issued a Buy rating for Indigo Paints with a revised price target of ₹1,350, representing significant upside potential from the current market price of ₹965.25. According to the broker's analysis, the stock is expected to deliver revenue and PAT CAGR of 9% and 11% respectively over FY25-FY28E, supported by gradual industry recovery and capacity additions.
The company's consolidated revenues grew by 4.7% year-on-year to ₹359 crore, driven by 3.5% growth in standalone business to ₹339 crore and 31.5% growth in Apple Chemie subsidiary to ₹20 crore. However, lower sales in October 2025 due to early Diwali and extended monsoon affected overall revenue performance. The operating profit margin (OPM) rose by 236 basis points to 19%, aided by lower advertising and promotional spends which were 260 basis points lower year-on-year at 5.6%.
According to the broker's report, emulsions reported a 3.4% volume decline and 0.2% value growth, while enamels and wood coatings posted volume/value growth of 20.2%/18.9% respectively. Putty and cement paints grew by 2.1% in volume and 5.5% in value terms, and primers, distemper and others delivered 7.4%/12.5% volume/value growth respectively. Gross margins remained stable at 46.8% supported by lower raw material prices and better product mix.
The stock currently trades at 30x/27x/24x its FY26E/FY27E/FY28E earnings respectively. As reported by Mirae Asset Sharekhan, a gradual recovery in the paints industry, widening presence across markets and capacity additions will aid revenue growth, while stable or lower raw material prices will support profitability in the near-medium term. The broker expects IPL to clock revenue and PAT CAGR of 9% and 11% respectively over FY25-FY28E.
According to the broker's analysis, higher competitive pressure or increase in key input prices are identified as key risks to the company's earnings estimates. The report emphasizes that these factors could impact the projected revenue and profit growth trajectory for Indigo Paints in the coming years.
