Indigo Paints - Colorful Prospects: Motilal Oswal Initiates Coverage
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Motilal Oswal Report
Established in the year 2000, Indigo Paints Ltd. is the fifth largest company operating in the Rs 542 billion ($7.2 billion) paints industry in India. Its product portfolio includes emulsions, enamels, wood coatings, distempers, primers, putties and cement paint.
Despite being a late entrant to this industry with high entry barriers, Indigo Paints has been able to create its presence in the market through its multi-pronged strategy of introducing differentiated products, high ad spends (as a percentage of sales), focusing on the rural markets, and increasing the penetration of tinting machines.
The company has a presence in 27 States and seven Union Territories with its distribution network of more than 14,700 dealers.
We expect Indigo Paints to continue with its robust strategy and thereby deliver a sales/Ebitda/profit after tax compound annual growth rate of ~28%/35%/41% over FY21–24E.
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