Indigo Paints Limited

Basic Materials — Specialty Chemicals · NSE

₹1,040.90+₹5.10 (+0.49%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Indigo Paints Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Indigo Paints Limited manufactures and sells decorative paints in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees1,188

Annual revenue₹1,399 Cr

How does it make money?

Turns over ₹1,399 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 1,188 employees supports ₹1.18 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.18 Cr

Who are its competitors?

The closest listed comparisons in its industry are ASIAN PAINTS LIMITED, PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 15.9% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE22.3%

What is the outlook?

8 analysts covering the stock expect revenue to grow about 11.0% and earnings to grow about 13.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.0%

Est. earnings growth+13.9%

Analysts8

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +31% while net margin moved -16% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+31%

Margin effect-16%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 9.4% is steady
✗ Profit CAGR of only 3.2%
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

56/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

63/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

30.9x

3Y Median

38.9x

40 monthly readings · mean 41.5x · range 23.9x–56.8x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 20% below its 3y median of 38.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 23% below the peer median of 40.4x.

vs. its own history

Cheap

38.9x median over 40 months · -20%

vs. sector peers

Cheap

40.4x median of 4 peers · -23%

vs. generic bands

Fair

15x–35x

EV/EBITDA

19.5x

PEG

9.63

What's Good / What's Bad

🟢 What's Going Well2

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 17.0% to 12.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 19.7% to 15.9% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 78% over 3 years, from ₹12 Cr to ₹21 Cr.
🔴High leverageFinancial
Debt/Equity of 1.83x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 20% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 23% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 1.83x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 17.0% to 12.6%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 16%✓ 18.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 7% a year✓ 9.4% CAGR
Latest reported year was 19.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹88 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 15.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹4,968 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

30.9x

Fair

Fairly valued against the generic band

P/B Ratio

4.30x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹33.64

Profitable

Profitable on a per-share basis

ROE

12.6%

Moderate

Moderate capital efficiency

ROCE

15.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.83x

High

High leverage

Revenue Growth (YoY)

19.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

60.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.48%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹88 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

24.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

12.6%

Average

Average margins

Net Margin

11.0%

Good

Strong bottom-line conversion

Current Ratio

2.21

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.54

Defensive

Steadier than the market

52W Range Position

52%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1072.7 / 1112.1

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

29.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,068 Cr	₹1,300 Cr	₹1,334 Cr	₹1,399 Cr	+9.4%
EBITDA	₹183 Cr	₹239 Cr	₹234 Cr	₹255 Cr	+11.6%
EBITDA Margin	17.2%	18.4%	17.6%	18.2%	—
PAT (Net Profit)	₹132 Cr	₹147 Cr	₹142 Cr	₹145 Cr	+3.2%
EPS	₹27.67	₹30.87	₹29.68	₹30.34	+3.1%
ROE	17.0%	16.3%	13.8%	12.6%	—
ROCE	19.7%	20.4%	17.2%	15.9%	—
Total Debt	₹12 Cr	₹21 Cr	₹27 Cr	₹21 Cr	+21.2%
Free Cash Flow	-₹83 Cr	₹47 Cr	₹69 Cr	₹88 Cr	—

🟢 Revenue has grown at 9.4% a year over 3 years.

🟢 EBITDA has grown at 11.6% a year over 3 years.

🟢 EBITDA Margin has risen from 17.2% to 18.2% over 3 years (+1.0 pts).

🟢 PAT (Net Profit) has grown at 3.2% a year over 3 years.

🟢 EPS has grown at 3.1% a year over 3 years.

🔴 ROE has fallen from 17.0% to 12.6% over 3 years (-4.4 pts).

🔴 ROCE has fallen from 19.7% to 15.9% over 3 years (-3.8 pts).

🔴 Total Debt has grown at 21.2% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹83 Cr to ₹88 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,629 Cr

Total Liabilities

₹475 Cr

Cash & Equivalents

₹32 Cr

Operating Cash Flow

₹223 Cr

Capex

-₹135 Cr

Shareholding (proxy)

Institutional Holding

28.2%

Insider Holding

53.8%

Corporate Actions

Dividend Rate

₹5

Ex-Dividend Date

04 Sept 2026

Analyst Consensus

Recommendations

6 Buy · 1 Hold · 1 Sell

Target Price (Mean)

₹1,287.5

+23.7% vs CMP

Target Range

₹975 – ₹1,515

Peer Comparison

Company	P/E	ROE
ASIAN PAINTS LIMITED	46.9x	22.3%
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

2 positive2 mixed2 general

Indigo Paints (INDIGOPNTS) Share/Stock Price Live, NSE

TechGraph, 12 Oct

Indigo Paints (NSEI:INDIGOPNTS) Stock Forecast & Analyst Predictions

Simply Wall Street, 06 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Indigo Paints share price jumps 6% on strong Q1 earnings; profit rises 61%

Moneycontrol.com, 14 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Earnings call transcript: Indigo Paints posts strong Q1 2026 growth, shares rise

Investing.com, 14 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Indigo Paints Q1 Results: Profit Zooms 61% As Margins Expand; Revenue Up 20%

NDTV Profit, 13 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Indigo Paints files FY26 annual report, sets Sep 12 AGM

scanx.trade, 21 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑