Indigo Paints Limited Q1 FY23 operational income has grown by 43.56% over Q1 FY22 from Rs. 156.02 crore to Rs. 223.99 crore.

With stabilizing raw material prices, Gross Margins have improved on a sequential basis from 43.61% (Q4 FY22) to an industry leading 45.19%. The Gross Margin is largely on par with the figures of Q1 FY22. EBITDA and PAT have expanded by 74.97% and 1.53% respectively over Q1 FY22. EBITDA margin has sharply expanded to 15.75% from 12.92% in Q1 FY22.

In line with the industry, the company has been passing on incremental price increases to the consumers in a staggered manner. Raw material prices have largely stabilized, and have started softening.

Due to several rounds of price increases, the value growth in each category of decorative paints is higher than volume growth. In line with our focus, the company continues to witness higher volume growth in the Emulsions segment (by far the largest contributor to overall value sales), and Premium Emulsion category in particular.

With comfortable margins and stabilizing raw material prices, the future focus will be on aggressively increasing growth. The strategy on increasing the presence in the Tier-1 and Tier-2 cities are showing early indications of traction and are expected to yield rich results in the next 2-3 quarters.

The company is planning to fortify its existing strong presence in Kerala with a launch of targeted regional advertising and have signed on Mohan Lal as the Brand Ambassador. The company is planning to increase Active dealer count and Tinting machine population, especially in larger towns. The company expects a much sharper increase in profitability parameters in future quarters.