Indigo Paints Q4FY25: A Muted Quarter Amid Competitive Pressures
Key Highlights from Q4FY25
Let’s dive into the numbers:
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Revenue: ₹57.4 crore, up only 0.7% YoY — a modest gain in a competitive landscape.
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Recurring PAT: ₹57.4 crore, up 5.4% YoY, beating estimates by 15.2%, thanks to tighter cost control.
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Gross Margin: 46.8%, down 205 bps YoY due to a weaker mix and higher trade discounts.
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Management sees a sequential demand uptick ahead, supported by initiatives like A&P cuts and logistics optimization.
Management’s Outlook
Looking ahead, the company expects:
- Earnings to de-grow by 7.2% in FY26E
- Growth of 12.4% in FY27E
While the competitive intensity remains a challenge, Indigo Paints is focusing on core cost management and product positioning to protect margins.
Pressures to Watch
The main challenges remain:
- Subdued demand environment, impacting overall growth and margins.
- Valuation concerns, with the stock trading at a 33.6x P/E on FY27E EPS — a level that doesn’t fully capture near-term uncertainties.
Snapshot – Key Numbers
| Metric | Q4FY25 Highlights |
|---|---|
Revenue | ₹57.4 crore (+0.7% YoY) |
Recurring PAT | ₹57.4 crore (+5.4% YoY,15.2% beat) |
Gross Margin | 46.8% (↓205 bps YoY) |
FY26E Earnings | ↓ 7.2% expected |
FY27E Earnings | +12.4% expected |
P/E (FY27E EPS) | 33.6x |
Revised Fair Value | ₹1,000 (down from prior) |
Final Verdict: Competitive Landscape, Muted Expectations
| Particular | Details |
|---|---|
CMP | ₹1045 |
Target Price | ₹1000 |
Rating | REDUCE |
Indigo Paints is navigating a patchy demand backdrop and a rise in competitive intensity. While recurring profitability showed some resilience in Q4, cautious near-term outlook and expensive valuations keep the call at REDUCE.
Disclaimer & Full Report
This feature is based on a synopsis of a research report issued by Kotak Securities Limited. For the full story (and disclaimers), make sure to check out the original sources:
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