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Indigo Paints Q1 Review - Trending Well: ICICI Securities

Indigo Paints Q1 Review - Trending Well: ICICI Securities

<div class="paragraphs"><p>An employee dips a paint brush in a pot. (Photographer Chris Ratcliffe/Bloomberg)</p></div>
An employee dips a paint brush in a pot. (Photographer Chris Ratcliffe/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Despite tough operating conditions, Indigo Paints Ltd. has continued to demonstrate strong business model and execution via-

  1. expansion of dealer count and tinting machines by 5.1% and 6%, QoQ,

  2. while Kerala revenues are likely impacted in Q1, outperformance in other states is pleasing and

  3. it has successfully increased product prices eight times in past 12 months.

As Indigo Paints has raised prices of different products every month, there is limited impact on volumes, in our view.

While input inflation is a headwind for gross margins, we model Ebitda margin expansion of 270 basis points YoY to 19.7% in FY22 driven by-

  1. price hikes,

  2. lower advertising and promotion and

  3. cost saving initiatives.

Click on the attachment to read the full report:

ICICI Securities Indigo Paints Q1FY22 Results Update.pdf

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