Indigo Paints Limited — Q3 FY26 earnings call

Call held 16 Feb 2026

Management summary

Indigo Paints reported resilient Q3 FY26 performance with consolidated revenue up 4.7% and EBITDA growing 19.5%, driven by premium product mix and cost management. Standalone EBITDA margin expanded to 19.4%. While October faced headwinds, November and December saw double-digit growth. The company's subsidiary, Apple Chemie, also showed strong growth. Management is optimistic about sustained momentum and aims for 20% growth in FY27.

Highlights

  • Consolidated Revenue grew 4.7% YoY to ₹358.8 crores, with standalone revenue at ₹338.9 crores, up 3.5% YoY.

  • Consolidated EBITDA increased 19.5% YoY to ₹68.3 crores, and standalone EBITDA grew 14.5% YoY to ₹65.6 crores.

  • Standalone EBITDA margin significantly improved to 19.4% in Q3 FY26 from 17.5% in Q3 FY25.

  • PAT (excluding exceptional item) grew 11.2% YoY to ₹40.5 crores, with margin expanding to 11.8% from 11.0%.

  • Enamels and wood coatings led growth with 18.9% value and 20.2% volume growth in Q3 FY26.

  • Apple Chemie subsidiary delivered stellar growth, with Q3 revenues up 31.5% to ₹20 crores and improved gross margins.

Concerns

  • A one-time expense of ₹5.85 crores was booked for gratuity provision, impacting reported PAT.

  • Emulsions showed a modest 0.2% value growth and a slight 3.4% volume dip in Q3 FY26.

  • October saw softness due to delayed monsoon withdrawal and an early Diwali festival, compressing the sales window.

Key financials

  1. Standalone Revenue ₹338.9 Cr +3.5%YoY
  2. Standalone EBITDA ₹65.6 Cr +14.5%YoY
  3. Standalone EBITDA Margin 19.4%
  4. Standalone PAT (excl. exceptional) ₹40.5 Cr +11.2%YoY
  5. Consolidated Revenue ₹358.8 Cr +4.7%YoY
  6. Consolidated EBITDA ₹68.3 Cr +19.5%YoY

What they filed

Q1 FY27: revenue up 18.6%, net profit up 61.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue289 327 367 295 298 +3%339 +4%398 +8%350 +19%
EBITDA43 57 86 44 46 +7%66 +16%92 +7%62 +41%
Net profit24 36 57 26 26 +8%36 +0%57 +0%42 +62%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentValue GrowthVolume Growth
Enamels and Wood Coatings18.9%20.2%
Primers, Distempers and Others12.5%7.4%
Putty and Cement Paint5.5%2.1%
Emulsions0.2%-3.4%
Apple Chemie——

Capital allocation

medium confidence
  • Capex Capex disclosed
    • New solvent-based plant in Jodhpur
    • Brownfield putty plant expansion at Jodhpur
    • New water-based plant at Jodhpur (90,000 kiloliters per annum)
    • Modernization and automation of Jodhpur plant
    On the capex front, production has commenced at our new solvent-based plant in Jodhpur, enabling us to better serve enamel demand in the Northern and Eastern regions of the country, which were previously catered from the Tamil Nadu facility. We have also started output from our brownfield putty plant expansion at Jodhpur. What remains is the new water-based plant at Jodhpur with a capacity of 90,000 kiloliters per annum, which is now expected to start production sometime in June 2026. Despite the delay in implementation schedule, we have enough capacity to meet demands for water-based paint products as of now. And this will bring our significant capex to an end for the next foreseeable 4, 5 years. This will carry us through till maybe FY '29. So there will be a temporary dip in some ratios, like return on capital employed and all that. But that will recover itself in the next couple of years. And as far as operation is concerned, it is linked to demand in the market and what we can get and not so much related to the capacity that we have built up.

Guidance & targets

Revenue

  • Q4 FY26 Revenue Growth Revenue · Q4 FY26 · High confidence double-digit growth
    we are quite optimistic that this robust momentum will persist through the remaining months of FY '26, positioning us strongly for the seasonally strong Q4.

    — Hemant Jalan

  • FY27 Revenue Growth Revenue · next fiscal (FY27) · Medium confidence 20% growth
    if the demand comes back properly, we should go back to our 20% growth sometime next fiscal.

    — Hemant Jalan

Capex

  • Completion of significant capex Capex · next 4-5 years, till FY29 · High confidence end of capex
    And this will bring our significant capex to an end for the next foreseeable 4, 5 years. This will carry us through till maybe FY '29.

    — Hemant Jalan

Capacity

  • Jodhpur Water-based Plant Production Start Capacity · June 2026 · High confidence sometime in June 2026
    What remains is the new water-based plant at Jodhpur with a capacity of 90,000 kiloliters per annum, which is now expected to start production sometime in June 2026.

    — Hemant Jalan

Profitability

  • Return on Capital Employed (ROCE) Recovery Profitability · next couple of years · Medium confidence recover itself
    return on capital employed and all that. But that will recover itself in the next couple of years.

    — Hemant Jalan

Dealer Network

  • Throughput per dealer Dealer Network · Medium confidence 50% more
    We need to get 50% more out of the dealers that we have to get our real growth.

    — Hemant Jalan

What to watch in Q4 FY26

Q4 FY26 Revenue Growth

Q4 FY26
Current 3.5% (Q3 standalone revenue growth)
Target Double-digit growth

Why it matters

Indicates sustained demand recovery and the company's ability to capitalize on it, crucial for overall FY26 performance.

we are quite optimistic that this robust momentum will persist through the remaining months of FY '26, positioning us strongly for the seasonally strong Q4.

Risks & concerns

  • Depreciation load from new Jodhpur plant impacting PAT

    medium

    New plant will add depreciation, affecting PAT in the short term, but expects recovery in 2 years as demand picks up.

    Management acknowledged

  • Competitive intensity from new entrants and existing players

    medium

    Management believes profitability has not been impacted by new entrants, focusing on differentiated products and market share gains.

    Analyst downplayed

  • Temporary demand slowdown due to weather and festival timing

    low

    October softness caused by delayed monsoon and early Diwali, compressing sales window, but recovery seen in Nov-Dec-Jan.

    Management acknowledged

  • One-time gratuity expense impacting PAT

    low

    ₹5.85 crores booked for gratuity provision, impacting reported PAT, but excluded for apple-to-apple comparison.

    Management acknowledged

Q&A highlights

8 direct
Paint demand recovery and consumption patterns Direct
after 2 years, this is the first time when for 3 months in a row, November, December and January, we are seeing double-digit growth in value.

Addresses the muted paint demand over the past two years, highlighting recent positive trends and attributing October's softness to specific weather and festival timing.

Asked by Prakash Kapadia

Product mix and contribution of different categories Direct
the share of the premium end of emulsions has been significantly rising continuously for the last 2 years. ... waterproofing, which was zero for us 2 years ago, is now accounting for about 7% of our top line.

Provides insight into the company's premiumization strategy and the growing contribution of high-margin products like waterproofing, while acknowledging underperformance in economy emulsions until recently.

Asked by Prakash Kapadia

Advertising spend and competitive intensity Direct
on an absolute amount, we are fairly good. I mean, I would say that after Asian, Birla Opus and Berger, we are the next largest advertiser on television. And I think that, that is where we intend to stay.

Clarifies the company's advertising strategy, noting that while A&P as a percentage of revenue has dropped, absolute spend remains competitive, and focus is shifting to influencer engagement.

Asked by Abneesh Roy

Net discounting, pricing, and gross margins Direct
the discount compared to the same month of last year is slightly higher. And despite that, the gross margins maintain as to where they were. I mean, in Q3 of last year, our gross margin was 47.2%, and this time, it is 47.1%.

Explains how the company maintains high gross margins despite increased discounting, and indicates a strategic shift to leverage these margins for higher sales growth.

Asked by Abneesh Roy

Jodhpur plant capacity and market share growth Direct
in this industry, capacity and sales are not necessarily correlated. I mean having more capacity does not necessarily result in higher sales. So capacity expansion and modernization and automation is a continuous process that you indulge in for the long term.

Addresses concerns about capacity utilization and the impact of depreciation from new plants, emphasizing that capacity expansion is a long-term strategic move not directly tied to immediate sales.

Asked by Rohit Ranjan

Apple Chemie's performance and B2B infrastructure focus Direct
they have grown by 31% or 31.5% in this quarter compared to the same quarter last year. So they are getting the benefit of the increased infrastructure spends in India.

Highlights the strong performance of the subsidiary, Apple Chemie, driven by its focus on infrastructure projects and its expansion into new product lines.

Asked by Rohit Ranjan

Confidence in high growth rates and competitive edge against larger players Direct
The differentiated products for which we are known for, which still account for anywhere from 28% to 29% of our portfolio, now these products were launched by us anywhere from 15 to 10 years ago, and they have been in the market for a long time.

Reassures investors about the company's ability to sustain high growth, citing its historical performance, differentiated product portfolio, and agile 'startup mindset' despite competition.

Asked by Bobby Jay

Pricing discipline in the industry and Indigo's strategy Direct
if the market leader decides to either increase or reduce prices, and I don't see a trigger for either of that happening in the foreseeable future. But if for reasons best known to it, if it chooses to either increase or reduce prices, I think the whole industry will be forced to follow suit.

Provides management's perspective on pricing dynamics, indicating that while they monitor competitor actions, the overall industry pricing is largely dictated by the market leader, and no significant changes are expected.

Asked by Aniruddha Joshi

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance and Demand Recovery

Indigo Paints reported a resilient Q3 FY26, with standalone revenue from operations at ₹338.9 crores, a 3.5% Y-o-Y growth, and consolidated revenue at ₹358.8 crores, up 4.7% Y-o-Y. Despite a temporary setback in October due to delayed monsoons and an early Diwali, the company achieved impressive double-digit growth in November and December. Standalone EBITDA margin significantly improved to 19.4% from 17.5% in Q3 FY25, with absolute EBITDA growing 14.5% Y-o-Y to ₹65.6 crores. PAT, excluding a one-time gratuity expense of ₹5.85 crores, stood at ₹40.5 crores, reflecting an 11.2% growth.

Product Mix and Premiumization Strategy

The company's profitability was powered by a favorable product mix emphasizing premium offerings. Enamels and wood coatings led with strong 18.9% value growth and 20.2% volume growth. Primers, distempers, and others registered 12.5% value growth and 7.4% volume growth. Waterproofing products now account for close to 7% of the top line. While emulsions saw a modest 0.2% value growth and a 3.4% volume dip, the premium end of emulsions continued to perform well, contrasting with industry trends of value growth lagging volume growth.

Distribution Expansion and Marketing Initiatives

Indigo Paints continues to expand its dealer network, reaching over 19,100 active dealers and more than 11,900 tinting machines as of December 31, 2025. A new depot was opened in Prayagraj, Uttar Pradesh, bringing the total to 55. The company moderated traditional advertising expenses, with A&P spend declining to 5.9% of top line for 9M FY26 from 7% in 9M FY25, instead ramping up investment in direct influencer engagements. The packaging of the Indigo Protect Plus series was refreshed, backed by a new advertising campaign.

Capex and Capacity Expansion

Production has commenced at the new solvent-based plant in Jodhpur and the brownfield putty plant expansion at Jodhpur has started output. The new water-based plant at Jodhpur, with a capacity of 90,000 kiloliters per annum, is expected to start production in June 2026. Management indicated that this significant capex cycle will conclude in the next 4-5 years, carrying through till FY29, and expects return on capital employed to recover within the next couple of years despite short-term depreciation impact.

Apple Chemie Subsidiary Performance

The subsidiary, Apple Chemie, delivered stellar growth in Q3 FY26, with revenues increasing 31.5% to ₹20 crores. The company has commenced production at its new sealant plant in Nagpur and is actively pursuing export opportunities. Apple Chemie's growth is benefiting from increased infrastructure spending in India, particularly in Maharashtra, Madhya Pradesh, Southern, and Eastern India.

Industry Outlook and Competitive Landscape

Management noted that the Indian paint industry is showing signs of measured recovery, with Indigo Paints outpacing broader market trends in November, December, and January. While acknowledging competitive intensity, management believes its differentiated products, which constitute 28-29% of its portfolio, provide a sustained competitive edge. They do not foresee significant changes in industry pricing, which is largely dictated by the market leader.

ESG and CSR Initiatives

Indigo Paints remains dedicated to sustainable practices, commissioning a 330-kilowatt solar panel at its Cochin factory. Through its Indigo Seva Utsav initiative, over 200 government schools have been repainted. CSR efforts include supporting education for over 360 underprivileged girls in Pune via the Payal Jalan Charitable Trust Educare program, aiding over 36,000 painter families through the Health Benefit program, and training over 950 painting contractors with business development skills.

This is an AI-generated summary of a publicly available earnings call transcript.
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