Indigo Paints profit dips 47% despite 15% revenue growth

Indigo Paints’ Q2 FY27 results show a sharp profit decline of 47% despite 15% revenue growth, leading to a 12–13% share price drop to around ₹866. Analysts attribute the fall to higher raw material costs and advertising expenses, but brokerages like Nuvama still maintain a ‘BUY’ rating. 📊 Key Financial Highlights (Q2 FY27) Metric Q2 FY27 Q2 FY26 Change Revenue ₹359 crore ₹312 crore +15% Net Profit ₹13.3 crore ₹25.1 crore −47% EBITDA ₹31 crore ₹47 crore −33.5% EBITDA Margin 8.7% 14.9% −628 bps Gross Margin 38.3% 44.8% −643 bps Market Cap: ₹4,186 crore Share Price (Nov 2, 2026): ₹866.8 (↓13.15%) P/E Ratio: 27.7x consolidated 🧾 Reasons Behind the Profit Decline High-cost raw material inventory carried forward from Q1 inflated input costs. Unfavourable product mix reduced gross margins. Increased advertising & promotional spending to strengthen brand visibility. Higher purchase of traded goods and inventory buildup impacted profitability. 💡 Management Outlook Expects EBITDA margins to normalize in H2 FY27 as raw material costs ease. Plans to revive dealer network and optimize product mix for better margins. Subsidiary Apple Chemie India Pvt. Ltd. grew 35.3% this quarter, offering a positive offset. 📈 Analyst & Market Reaction Nuvama Wealth Management: Maintains BUY rating despite short-term margin pressure. Comparison with Asian Paints: Indigo’s EBITDA fell 33.5% YoY, while Asian Paints’ grew 4% YoY — highlighting operational divergence. ⚠️ Investor Takeaways Short-term headwinds: Margin compression and cost volatility may persist through Q3. Medium-term potential: Strong revenue growth and brand expansion could support recovery. Watch for: Raw material cost trends, product mix improvement, and dealer network expansion.