Indigo Paints Limited (NSE: INDIGOPNTS) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Srihari Santhakumar — General Manager, Finance and Investor Relations
Analysts:
Unidentified Participant
Aniruddha Joshi — Analyst
Yash Goenka — Analyst
Prakash Kapadia — Analyst
Avinish Roy — Analyst
Manoj Menon — Analyst
Prateek Maheshwari — Analyst
Ketan R. Chheda — Analyst
Presentation:
operator
Sa Ladies and gentlemen, Good day and welcome to The Indigo Paints Q1 FY26 earnings conference call hosted by ICICI Securities Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this call is being recorded with this. I now hand the conference over to Mr. Aniruddha Joshi from ICICI Securities. Thank you. And over to you sir.
Aniruddha Joshi — Analyst
Yeah. Thanks Samia. On behalf of ICICI securities, we welcome you all to Q1FY26 results conference call of Indigo Pence. Now I hand over the call to Mr. Sri Hari Santakumar, General Manager, Finance and Investor Relations to introduce the management and take the call forward. Thanks. And over to you Shihari Sir.
Srihari Santhakumar — General Manager, Finance and Investor Relations
Good morning everyone. Thanks Nehrut. Thanks everyone for joining the conference call for discussing the performance of the company for the first quarter we have uploaded the investor presentations in the portals of the stock exchanges. Kindly refer to the same for the disclaimers also regarding any future related statements to discuss the performance of the company. Today we have with us Mr. Heman Jalan, Chairman and Managing Director, Mr. Suresh Babu, Chief Operating Officer, Mr. Chetan Humane CFO and myself over to Mr. Jalan for discussing the performance of the company following which we’ll have a Q and A session as well.
Thanks. Good morning everyone and thank you for joining us to discuss Indigo Paint’s performance for the first quarter results of FY26. As mentioned, we have uploaded the investor presentations on the stock exchange portals and I presume that you have already gone through our financial results. After a hiatus of over 12 months, it appeared that the demand in the paint sector was back in April and during the first half of May only to be quashed by the early onset of monsoons which rained in full fury from mid May till the end of June. This impacted the sales in many states particularly in Kerala and Northeast where monsoons are the first to arrive.
Earlier the week long Indo Pakistan conflict in May had disrupted sales in some northern bordering states to Pakistan. Despite these challenges, Indigo Paints has managed to achieve a small but positive growth for the quarter. Let me first come to our stand alone results. Compared to Q1 of FY25, our sales in Q1 of FY26 have registered a value growth of 0.3%. We continue to maintain the poll position in terms of gross margin which stood at 46.1%. The EBITDA decreased from 45.8 crores in Q1 of last year to 43.6 crores in Q1 of this year registering a negative growth of 4.7%.
The EBITDA margin of 14.8% clocked in this quarter was slightly less than 15.6% clocked in the corresponding quarter of last year. The PAT is largely flat at 26.4 crores compared to the similar period in the previous year. The PAT margin is also flat at 8.8% compared to 8.9% registered in Q1 of last year. Now I would like to bring to your attention that historically For Indigo paints Q1 and Q2 are low margin quarters. The margins start expanding in Q3 and hit a peak in Q4. This pattern is due to the product mix changes during the course of the year.
If you have tracked our EBITDA margins over the last four years, you will realize that our year round EBITDA margins are always significantly higher than than the figures in Q1. Coming to consolidated results, our revenue degrew by 0.7% to 308.9 crores during the quarter while the EBITDA registered a negative growth of 6.5% dropping from 47.4 crores in Q1 of last year to 44.3 crores this year. Subsequently the PAT has also reduced marginally by 2.2% from 26.7 crores in Q1 of last year to 26.1 crore in Q1 of this year. The EBITDA margin for the quarter on a consol basis was 14.3% and the PAT margin was 8.3%.
Our subsidiary Apple Chemi has registered a negative growth of 17.6% in Q1 FY26 compared to the same quarter last year. Their sales were affected due to onset of early monsoons which affects road construction and Metro projects across India. However, on a positive note, Apple Chemi’s gross margin has improved significantly during the quarter under consideration subsequent to the strategic focus by the management on improving product mix and consolidating their operations to the more profitable projects. Apple Chemmy is also launching more products towards the end of the current quarter which is expected to improve the margins further.
I shall now give you some more operational details about the quarter going beyond financial numbers. During the last quarter the overall ANP spends as a percentage of revenue decreased from 7.2% in Q1 of last year to 6.8% in Q1 of this year. For the seventh straight year we had invested in brand building through IPL. We have intensified our digital outreach further to engage better with the consumers and the influencers. We are launching our own experiential centers branded as Indigo Color Canvas stores through which we can exclusively exhibit our full range of products in an aesthetically designed store.
We expect to launch somewhere around 50 to 70 such stores in India during this fiscal year, the first few ones having already started. In line with our disclosure practices, we have given our volume and value growth numbers for each of the four major categories of paint products during the quarter under consideration. Both enamel category and the Primer category grew both in volume and value terms with value growth being significantly higher than volume growth. Putti and Emulsions have witnessed volume and value negative growth in the Emulsions segment which is the largest segment. Although the volume negative growth was 5.4%, the value degrowth was only 0.9%, showing that the product mix has improved more towards the premium range.
We continue to focus on network expansion on improving the throughput for active dealer Increasing our tinting machine population as on 30 June 2025 our count of active dealers was around 18,600 and the tinting machine population was about 11,300. This network expansion happened despite the heavy monsoons on the Capex front. Work is progressing in both the water based paint plant and the solvent based paint paint plant both at Jodhpur. As we have mentioned earlier due to delays in civil construction work in the water based plant, that plant is now expected to be commissioned sometime in Q3 or Q4 of FY26 while the solvent based plant is expected to be up and running by the end of the current quarter.
The brownfield expansion of our Putti plant at Jodhpur will also be completed around the same time and that is by the end of this quarter. However, these minor delays are not expected to cause any impact as we have more than enough capacity to cater to our existing demand. The waterproofing and construction chemical products continue to consistently yield good results contributing to high single digit share in our overall revenue piece and we are hopeful that their share in our revenues will soon cross the 10% mark. Coming to sustainability initiatives, the installation of rooftop solar plants panels at our Cochin facility is complete and waiting for regulatory approvals.
As we have mentioned earlier, we have started a new initiative called Indigo Seva outset. Under this initiative Indigo Paints along with the painters and community at large is undertaking painting of government schools in tier 2 and tier 3 towns and during the last quarter we have painted over 45 schools across the length and breadth of the country. On the CSR front, we continue to extend educational benefits for the underprivileged girls around Pune. There are over 360 beneficiaries of this initiative so far. Indigo had also introduced a painter health benefit program one and a half years ago.
And during the quarter an additional 7,500 painter families have been enrolled pan India, taking the total number of beneficiaries under the program to about 32,500 painter families. Finally, what seemed to be a good start for the quarter in April changed due to the early onset of monsoons. Indigo Paints, which is more indexed to Kerala, was affected to a higher degree compared to our industry peers. However, we are once again seeing notable recovery in sales in the month of July, which has been a good month, and we are keeping our fingers crossed and expecting a sustained performance in the second quarter.
On the raw material front, prices continue to soften, although marginally, and we expect our margins to be stable going forward. So that’s all I have as an opening comment and I’d be happy to answer your questions now.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question comes from the line of Yash Goenka from Avriga Capital Advisors llp. Please go ahead.
Yash Goenka
Hi. Thank you. Am I audible?
Srihari Santhakumar
Yes. Yes, yes, yes you are.
Yash Goenka
Other peers have been highlighting about certain issues with respect to demand and competitive pressures in southern markets. Can you comment on your sales mix. And growth in the southern region?
Srihari Santhakumar
See, we are. As far as South India is concerned, other than Kerala, our share of market in other states like Tamil Nadu, Andhra, Telangana and Karnataka are fairly low. So I don’t think we are seeing any increased significant competitive pressure in Kerala. For the other states. I think our share of market is quite low for us to be materially impacted and we wouldn’t notice any change in the competitive pressure. Really. Kerala has been plagued with a demand softening during the last several months and I understand that it’s not just for us but for all paint companies.
The early monsoon and the vigorous rains have not helped matters. I presume there would be a good pent up demand and we are just waiting for the bounce back to happen.
Yash Goenka
Okay, sir, can you comment on the. Mix for the southern region.
Srihari Santhakumar
The product mix in the southern region is not very different from the rest of India. Low margin items like putti tend to sell a little less in southern India compared to other parts of India. Our differentiated products tend to sell a bit disproportionately higher in southern India. So, you know, if you look at margin contributions overall, I would say southern India is ahead of other parts of India as far as Indigo Paints is concerned in terms of overall margin contribution. The low market share in some of the other southern states means that the headroom to grow there is huge.
And we have been doing reasonably well in southern states in terms of growth rate as far as that is concerned.
Yash Goenka
Sir, I wanted to know the sales mix. Can you comment about it for the southern part of the country?
Srihari Santhakumar
What specifically are you asking in terms of sales mix? I thought I’d already answered sales contribution. To the top line. Sir, for sales contribution to the top line, including Kerala, the whole of south. I’ll have to pull out that number. Just a second. I’ll give it to you. So372, you add that and south. Yeah, but I would say about 35% of our sales does come from south India, but a large portion of that is Kerala.
Yash Goenka
Okay, thank you. So that’s helpful. Yeah.
operator
Thank you. The next question comes from the line of Prakash Kapadia from Kapadia Financial Services. Please go ahead.
Prakash Kapadia
Yeah, thanks for taking my question. A couple of questions from my end. We’ve seen a good growth in enamels and wood coatings. I think 11.5% value growth. Is this on a low base or any specific geographies? And in the four categories, mng, which we mentioned in the ppt. Is this right? Understanding that enamel will be the highest margin business, followed by emulsion, then by primer and putti.
Srihari Santhakumar
And historically, no, I mean, when you say enamels and wood coatings, most of the good growth has actually come from the enamel where we were the pioneers in launching a very differentiated enamel called PU enamel, which over the years other larger peers have also attempted to duplicate. But we seem to have a very good hold in that part of the market and we seem to be doing well. Its overall contribution in the revenue pie is still a little less than what it is for other competitors. And the reason is that we only operate on the premium end of the enamel range.
We are not there in the sort of economy range. Having said that, enamels by themselves are not a very high margin contributor to any paint company. Wood coatings are different. They do contribute higher, although their share is significantly lower than enamels. In terms of margins, the highest margin contributor would always be the emulsion category.
Prakash Kapadia
Then Putti would be the lowest. Right.
Srihari Santhakumar
Putty would definitely be the lowest, no doubt about it. But cement, not bad. Cement paints are fairly good. So when we club the two together, of course Putti is the dominant contributor in that category. So Putti is slightly lower margin. But we have taken a price hike in putty towards the end of the quarter and most paint companies, including people outside the paint industry like Birla White and J.K. white, have all taken a slight price increase. So that helps matters a little bit. But it still remains a high volume, low margin part of the business as far as paints are concerned.
Prakash Kapadia
Understood. And you know, it’s been couple of quarters, you know, for the industry, including us, where, you know, demand has been muted. So is there, you know, fairly. You obviously mentioned about July being reasonable and we are seeing some traction. So is there now a case to build in recovery from H2 onwards? And what would you bet on? Would it be tier one, tier two cities, Would it be more of rural side and what will lead to this demand? Because, you know, over the last few years we’ve seen a fairly buoyant real estate cycle, but you know, we have not really benefited from that.
So what would you bank on from here on, assuming, you know, the demand would be back, is there a case to be.
Srihari Santhakumar
I’ll take your last observation first. See real estate boom that you see. First of all, only 15% of paints go into fresh construction. Most of it is repainting. And when you talk about the real estate boom, you’re talking about listed real estate players who operate in barely 10, 12 cities of India. So you’re not really talking about any real estate boom as far as what I call the Bharat is concerned, which is a conglomeration of tens of thousands of small towns where individual dwellings come up. So a better index for real estate growth is consumption of cement, which has not been the best in the last few quarters.
So if you look at Pan India, I don’t think fresh construction has seen any kind of a boom per se. Now coming to the major category which is repainting. Consumer demand has been soft and it is not been soft only in paints. It has been soft across all consumer categories. Now I think the government did what it could by giving a hefty tax break to the middle class. I think the RBI has done its share by cutting down repo rates three times in a row by 100 basis points overall. Now there is a time lag between all of this happening and the demand sentiment changing.
You are beginning to see significant proof of a demand recovery coming and it will first come in FMCG products, the staples. So you have seen a company like HUL report its highest value growth in the last quarter compared to the previous 12 quarters. Just two days ago the results of another company like Britannia was out which reported a value growth of some 8 to 9%. So indications from all other FMCG companies are that the demand is coming back. We ourselves saw a good demand bounce back in April and the first half of May. It’s just that our business is severely impacted by monsoons and this is one of those rare years when monsoon hit India 15, 20 days before it normally does.
And there has been no dry patch in the monsoon right till the end of July. So that did impact sales in the latter part of May and June. However, July, despite it being a heavily monsoon impacted month, we at least have seen very good growth in sales in July. Now whether it will sustain itself in August and September, we significantly hope so because there is fundamentally nothing wrong with the macros in the Indian economy. And I hope that when the demand comes back, it will come back with a bang because there should be a lot of pent up demand with the consumers who have not purchased the kind of quantities of paints that we would have normally expected them to purchase in the last five quarters.
So I’d expect to see a much better Q2 and a much, much better second half this year. But I preface it by saying that this is all conjecture. I mean the proof of the pudding lies in the eating. Let it happen and we’ll all bounce back.
Prakash Kapadia
Sure, sure, sure, that’s helpful. And lastly, from my side on apple, to me, you know, monsoon sales, do they come back and how much of, you know, sales on an annual basis would be from infra and construction chemicals for us? Because you know, if monsoon is a driver and that that really affects sales. So will, you know, sales bound back, bounce back. You mentioned about some product launches.
Srihari Santhakumar
So 100% of their sales are through infra projects. So they’re basically supplying to large contractors like L&T, BJ Shirk, AFCON and these big people of the world of the country who are engaged in large expressway construction, flyover construction and metro project construction, amongst other things. And these projects, when there was a much earlier than anticipated rainfall, these projects do kind of go in limbo when there is heavy rain and they normally do recover when the monsoons are over unless the government’s infrastructure spending comes down, which it is not likely to at all. So they do get made up and I think they are making up.
I mean they have had a slightly better July and their order book looks good as far as August and September is concerned. So I think they will bounce back in this quarter and you know, as the monsoon abates, which is some time away. So yes, monsoon does affect their business as much as it affects our paint business. In fact, it affects them more.
Prakash Kapadia
Thank you. All the best.
operator
Thank you. Before we move to the next participant, a reminder to all participants. You may press star and one to ask a question. The next question comes from the line of Avnish Roy from Nuvama. Please go ahead.
Avinish Roy
Yeah, thanks. My first question is on the demand side and rain relation to the demand, impact on the demand. I agree with your statement that monsoon does have significant impact on exterior paint and maybe other parts of the consumption also. So specific question here is Bihar, Northeast, Andhra, Telangana have seen double D deficit in rains till now. I do understand in some of these markets your presence might be low, but still from a trend perspective, are you seeing good growth in markets where currently there is low rainfall? Because taking the logic that rains impacts demand adversely.
So on the flip side, does it help demand when the rain is low in these five, six key regions?
Srihari Santhakumar
Well, Bihar actually has been a very good performer for us. So I was not aware that Bihar has been rain deficit till now. Thanks for informing. So Bihar has done well. Even Andhra has done well except for a little bit of slowdown in the north where in fact we have some little bit of manpower issues. But other than that, both the states which you mentioned have done well for us. Northeast. I’m really surprised to hear that it is deficit in monsoon because to the best of my knowledge it was very very heavy rainfall. See, monsoon hits Assam and northeast much earlier than the rest of India.
It normally hits in, you know, mid May is the normal time and this time it hit even earlier than that. So we have had a lot of flooding in huge parts of Assam. Now Assam in northeast is a fairly large geographic area. So I don’t know about which parts have been rain deficient and which have been rainfall excess. But from what we hear from the sales force, there has been more than expected rainfall in that part of the country. So we have been negatively impacted in the northeast no doubt.
Avinish Roy
So I was saying today’s data only. So BR is 27% deficit. Cumulative Assam is 38% deficit. This was IMD site only.
Srihari Santhakumar
And Arunite at today’s data avnish your including July till the first half of, you know, first week of August. Our results are yeah, first of June to today, first of June till today. But when you look at northeast, you really need to know from 1st of May onwards because a lot of the rainfall in the northeast happens there. But Bihar, yes, has done phenomenally well for us. In fact so has Bengal. And as Suresh just mentioned, we have also done fairly well in Andhra. I had not correlated that to a monsoon deficit but and you know Tamil Nadu is doing reasonably okay because Tamil Nadu, this is not the monsoon time.
Tamil Nadu, the rains will come in October and November. But most of India has been severely, I mean Kerala has had much more than its share of rainfall already. And you know in Maharashtra, I mean all our dams around Pune are already 90, 95% full when you’d expected them to be 65% full by now. So we have had a deluge in most parts of India. You are reading what is happening in the north in uttarakhand and Himachal etc. So there has been heavy rainfall. It looks like most parts of India there is a lull now for the next 10, 15 days.
I hope that early onset of monsoon also means early withdrawal. If that were to happen then that should augur well for September and October.
Avinish Roy
So that was my next question. In your outlook slide you have mentioned anticipating early withdrawal and generally we see if before Diwali we have three, four weeks of dry period, that is a good demand generator because then the walls cool, exterior paint and generally customer feels that this is now dried up so we can paint. So and because Diwali is early then the overall time which is available for monsoon to recede and the time available for the dryness to happen becomes curtained. So would you see this as a risk even nowadays commenting on the weather and monsoon mostly people go wrong.
Only from that yardstick that Diwali is early, doesn’t that pose one more risk to the overall demand side?
Srihari Santhakumar
It is. But what happens is that whenever Diwali is early and this time we have one of the earliest Diwali’s on 20th October. Normally rainfall in India continues till the first week of October. So when you have a early Diwali you don’t get much time for pre Diwali sales in the northern Hindi belt. And that is where Diwali has an impact. It doesn’t have an impact in southern India, but usually that gets made up for in subsequent months, you know, November, December, January. Whereas when you have a late Diwali, you usually have excellent pre Diwali sales but that is followed by a lull in the subsequent months.
So as far as the whole year is concerned it makes up for itself. So I don’t think one is that concerned about month wise sales or what happens in one quarter. As far as the overall year is concerned, early monsoon, late monsoon withdrawal, early withdrawal, all that in the course of the whole fiscal will correct itself. What we are more concerned about is the demand sentiment to come back and that is showing signs of coming back and we hope it comes back with a vengeance. And if the trend of July sustains itself in August and September that I think is more valuable than anything else.
See all these monsoon factors are partly built into the base of last year. You can have aberrations of late monsoon, early monsoon or early withdrawal or late withdrawal but over a slightly longer period of 2/4 combined they don’t have any material effect.
Avinish Roy
On the July aspect which you mentioned there is the last question on the demand side. So can July good performance be a false start? Because when you see July high rains and still the demand has been good and April May started well and then the later part suffered because of good monsoon. So July in spite of a good monsoon the demand has been good. Is it more of a pent up demand? Is it more that some of the states which you mentioned of Bihar, Andhra etc. Have seen less rain. So that is impacting the overall data points.
So would you get the what is the reason for the July good performance?
Srihari Santhakumar
I don’t have a way to analyze that avnish. Maybe you can help me split up the demand growth into all these various parameters as to how much is spent up demand and how much is deficient monsoon in certain parts etc. It’s very difficult to segregate all those things. I mean even when we rationalize and say that the demand was bad in June because of heavy monsoon, that is our post facto surmise as to that is the only plausible reason that could have caused it. Now when demand jumps back we try not to delve too deep as to what has caused that uptake.
We just take the improved demand as it comes and are happy because it’s coming after a long time. So as I said, fingers crossed. I can’t make any definitive predictions as to how demand will pan out in the months ahead. But as I said, we take cues that normally recoveries in demands in consumer sentiments tend to show itself first in the FMCG sector because those are most basic products as Opposed to paints which are slightly more discretionary. So when you’re seeing a bounce back happening in the FMCG sector, logic says that a turnaround in other sectors of consumer purchase are not very far behind.
That’s all I can say. But I’m not a macroeconomist or a weather scientist.
Avinish Roy
Understood. Sir, the last question on the competition you have said number of times analyst asks on the competition that is a barometer of how big is the impact. So I’ll come to that part this time I want your answers to three specific things. One is on the dealer incentives. Now the smaller players, I’m not talking about the market leader, the smaller players are saying that the dealer incentives are now almost converging for them and the new player and some of the tinting machines of the new player are getting returned in few areas, sporadic cases and 10% extra grammar also of the new player, also in some areas, in some skills getting returns.
Obviously you are a key market player. So what will be your take sir, on all these three?
Srihari Santhakumar
See, we have consistently said for the last two years, contrary to the commentary that was coming out from both the media and the collective analyst community, that an entry of a new player is not likely to be disruptive in such a large market as the decorative paint market of India is concerned. Now they had started out and you are referring to Birla Opus with very high dealer incentives and very high discounts, maybe about 10 percentage points higher than the rest of the industry. The prediction of outsiders was that this will devastate the margins of the paint industry.
And we were all collectively saying that that is not going to happen. And I think the truth has been borne out that it has not happened. Everybody’s gross margin is more or less the same as what it was a year ago or a year and a half ago, maybe plus minus half a percentage point. But nobody has followed the huge discounting policy of the new entrants. Now, if the new entrant has chosen to slowly lower its incentive structure and come back to a more industry convergent rate, good to see that happening. But even when they persisted on a very high discount, I don’t think it bothered the paint sector too much.
As far as the tinting machines coming back, I mean these are things that we do here on the ground. I don’t have definitive data as to how many tinting machines are being installed and how many are coming back from them. And as far as this extra 10% gramage is concerned, it is a fact. We have seen their public announcement. They first withdrew that in 4 liter packs and now they have withdrawn that in 10 liter packs. So these were independent actions that a new entrant took and it is for them to decide whether it has worked for them or it has not worked for them and at what point in time to, you know, shall I say throw in the towel as far as these kinds of measures are concerned which nobody else in the industry followed because nobody believes that these things are going to have a material effect in escalating sales in a sustained basis.
I don’t think we have been much impacted by their entry. Very, very few dealers of ours across India have opted to switch to that brand and therefore it’s been more or less a non issue as far as we are concerned.
Avinish Roy
Thank you sir for the detailed answer. Thank you.
Srihari Santhakumar
Thank you.
operator
Thank you. Ladies and gentlemen, to ask a question, press star and 1. Ladies and gentlemen, a reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Mr. Manoj Menon. Please go ahead sir.
Manoj Menon
Hi Heman team. Only one, one question. So let’s say when I think about, let’s say the last few years of your geographical expansion and also the context of the relative competitive intensity probably being different in the last 12 months in conjunction with an industry slowdown, both happened. Are there any changes to the medium term, let’s say the expansion plans would have done earlier. Is there something you need to tweak whether in terms of process people or. Everything is absolutely intact. Thank you.
Srihari Santhakumar
I think geographic expansion continues and it continues even for players who have been around for 70, 80 years. So that’s a constant process because you know, you keep appointing new dealers, you keep weeding out some old dealers who are either bad pay masters or for some reason are losing interest in paints. And you always lose some dealers to competition and you gain some from competition every year. So that little bit of churn is pretty normal in the industry that goes on. Having said that, you know our dealer density in northern part of India is still quite low.
So if you look at states like Jammu and Kashmir, Himachal, Punjab, Delhi, Haryana or even Rajasthan for that matter, there is a need to drastically increase our dealer intensity. And we try to do that. More important than increasing dealers, which is a constant ongoing process and especially increasing dealer in the larger cities, which is what we have focused on in the last two years, the more important thing is to increase throughput per dealer. And we find that in most states of India where we are lacking is not the dealer count. In fact our dealer count is in many, many states is equal to what the dealer count of a number two player or a number three player is.
However, their sales is significantly higher in those states despite having the same number of dealers. So now there is an attempt to identify dealers who are doing business with us, but maybe their volume of business with us is somewhat low and they are doing maybe 10x the business with a competitor and trying to target specific dealers where the potential is large and they are already doing business with us but their volume of business is low. And to see how we can grow that business in those existing dealers by 50%, 70% or even 100% which is eminently possible because their share of shop sale that we enjoy is fairly low.
If it is like 5 or 10% there is a good reason or should be easy to double that. So that is where the focus is going to and I mean these are all steps that you will keep taking to keep mining data and seeing what is the weakest link and where do you need to put your efforts for maximum growth and hopefully these efforts will bear fruits and you’ll see the results coming out in the subsequent quarters loud and clear.
Manoj Menon
Heman. Thank you. The only reason I asked that geography distribution question was, you know, because you had smartly, let’s say had Mr. Dhoni as a brand ambassador for more than a decade and your brand in my opinion, you know it’s a classic case of far higher awareness versus availability. I, I completely understood this door throughput. I just thought maybe, you know, maybe both can go in tandem.
Srihari Santhakumar
Yeah, not only Dhoni but also marquee ambassador from your home state, Manoj Men and Mohanlal. So we have had both of them for a long time, Dhoni for I think seven years now and intend to continue with him for many years going forward. So it’s true that we punch above our weight in terms of brand recognition partly due to the slightly unique ads, the creatives that we produce and certainly a large part of the credit to our brand ambassador Ms. Dhoni and Mohanlal in Kerala. So yes we enjoy good brand recall but encashing brand recall is not the easiest thing in the paint industry as you know which is why we have always talked about these high entry barriers in the paint industry.
And as yourself and I read your analysis reports of the paint sector of other companies, I think you are also coming to the conclusion that what the prediction was as to what devastation a new entrant would do has not really happened and the other players continue to exist with their margins intact.
Manoj Menon
Understood. And Heman one last question before I will fall back in the queue is that look, in a long period you reached, let’s say $150 million revenue currently. And when I with a certain set of templates which has worked for you, whether it is people, process, SOPs, etc, is there anything which have worked off late last six months, one year in terms of, let’s say, when you think about, you know, the journey from let’s say 150 million dollar to 300, 500, or you think that the current set of the ways of working is appropriate, you know, for the, let’s say the doubling from here or you know, even higher from now.
Srihari Santhakumar
Well, we had, you are aware that we had tried to acquire another paint company that was on the block and we came close but we lost out. And that’s fine. I mean these things happen in business and we keep looking around for both organic and inorganic modes of growth. There is nothing concrete on the table right now, but we keep looking. And while we keep looking for inorganic methods, we focus and double down on our efforts to grow at 2x 2 1/2x the industry growth while keeping profitability intact. For us, pecking order in any industry is not determined only by top line of what you said, you know, $150 million and to make it $500 million.
The idea is to do it in a profitable manner which rewards shareholders and all stakeholders. Because I don’t think pecking orders are decided only by top line. There is also something called a bottom line and there are several lines in between the top line and the bottom line which are all equally important. And we are very mindful of that. And our track record should show that we are as much focused on the bottom line as we are on the top line.
Manoj Menon
Thank you. And all the best same we can get back to the queue please.
operator
Thank you. The next question comes from the line of Pratik from hsbc. Please go ahead.
Prateek Maheshwari
Hello, can you hear me?
operator
Yes sir. You’re audible. Please go ahead.
Prateek Maheshwari
Thank you. Hi sir, this is Pratik from hsbc. I have a couple of questions please. A follow up on the dealer incentives bit that you mentioned. You mentioned that dealer incentives for the incumbents have not increased. So the data in the annual report of gross revenues and net revenues does indicate some increase in dealer incentives. Is that not the right way to look at it? And a two part question to that is, have the incentives for BIRLA opas also normalized now or they still remain high for dealers?
Srihari Santhakumar
So the first question, the answer is yes, Dealer incentives for the earlier incumbents have increased marginally. I don’t think there has been an attempt by anyone to ape what a new entrant has done. It is just that when the demand scenario is weak and top line growth becomes difficult, then there is a tendency by all incumbents to give a little bit extra to to try and gain a little extra market share. So you’re right. When you see the annual reports of companies, you will find that dealer incentives for the year have been marginally higher than what they were in the previous year.
Part of that is also because of softening of raw material prices. During the last one year, raw material prices have softened significantly. So there is a tendency to pass on that benefit to the trade or to the consumer in some manner which may enable higher top line growth. So that’s the answer to your first question. But I don’t think anyone has gone even remotely close to the discounting patterns of a new entrant. As far as them normalizing and coming and converging with the industry average. As far as schemes are concerned, I frankly really don’t know because I don’t track them that carefully.
And the reason we don’t track them that minutely is because we have really not been impacted by them in any significant extent. So we do know that there is some pullback happening at their end in extra grammage and maybe in discounts, maybe in credit limits and credit periods, etc. But these are all rumors that we hear in the market. But we have not applied our mind to very, very minutely tracking these behaviors of the incumbent of the new entrant.
Prateek Maheshwari
Very good.
Srihari Santhakumar
As a follow up, rather than looking at discounts, why don’t you track gross margins? Because that nets out the effect of raw material softening or hardening versus discounts. So if you track gross margins of companies, you will find that they are not very different from what they were a year ago. As I said plus minus half a percent here and there, gross margins have largely remained the same for all the listed paint companies. From whatever I observe, no noticeable change.
Prateek Maheshwari
Correct. But a follow up to that. If raw material prices have given a filip of say 3 to 4% on gross margins because of lower crude derivatives, lower TiO2 at the time, does that not also help the gross margin? So even if incentives might have increased gross margins were protected because of lower RMs, is that the right?
Srihari Santhakumar
I don’t think RM prices as an overall have come down by 3 to 4%. I mean it’s not come down that Much and on titanium dioxide in the last few months, we are faced with an anti dumping duty that has been slapped which has actually increased titanium dioxide prices temporarily. There is a court case pending in the Calcutta High Court filed by the Indian Paint association for which hearings are over and the judgment is awaited. We all hope that this anti dumping duty may get reversed if there is a favorable court decision on that. But we don’t know.
It is the other raw materials which have softened a little bit. I think their overall contribution in the basket of our purchase is certainly not as high as 3,4%. But if it is, let’s say 1.52% to that extent, of course discounts have gone up and that is why gross margins have kind of remained the same. See, most people are comfortable in operating in a certain gross margin range range in a certain EBITDA range as long as that range is not breached. There is always the tendency to increase trade discounts when raw material prices go down and to reduce trade discounts when raw material prices go up, keeping gross margins and EBITDA margins within a narrow band.
And I think that is what has played out.
Prateek Maheshwari
Okay, that makes sense. If I can squeeze in another question. Project business, what is our how much, what is our proportion of the project business? Do you see a change in intensity, in competitive intensity there? Can you please elaborate?
Srihari Santhakumar
We are not actively engaged in project business. I mean, our project business is more of a retail project kind of a thing wherein, you know, any kind of a lead given by the dealers, we service it through our retail network. We don’t have a separate vertical, we don’t have a separate product range, we don’t have separate pricing for projects. So which means we are not into the real big kind of projects. We are just into some retail projects which is part of the normal retail business.
Prateek Maheshwari
Understood. Okay, that answers my question. Thank you.
operator
Thank you. The next question comes from the line of Ketan R. Cheda and Retail investor. Please go ahead.
Ketan R. Chheda
Hi. Thank you for the opportunity. So my question is with respect to Apple Chemie, when we did the acquisition, I believe it was into probably just one state or one geography. And we had plans to kind of expand Apple K means reach in multiple states as far as possible. So could you, could you share some data and how well that strategy has played out so far after the acquisition has.
Srihari Santhakumar
Good question. Mixed results. Mr. Kirsten, Apple Chemie, after the acquisition tried to expand too fast in every corner of India and built up a huge manpower base in various places. Project business is a little slow in conversion and in some parts of India they found that the traction was not good and the costs were, were very high commensurate with the volume of business that was coming in even after waiting for about a year. So let’s say in north India they kind of decided to withdraw but they are getting good traction in south India and in eastern India where they continue.
So still the dominance is in the states of Maharashtra, Madhya Pradesh, Chhattisgarh, so what we call west and central India, that is where most of their business comes from. And those are the areas which are in closer proximity to their factory which is located in A in Nagpur and B in Navi Mumbai. We also realized that, you know, they also have a range of products like in our decorative paints you have low margin businesses like Putti and you have high margin business like emulsions and very high margin products like your differentiated specialty products. So the similar is the case with Apple Chemie.
You have various products which are very high margin and you have some products like admixtures which are generally on the lower margin side and which are very freight sensitive and therefore it doesn’t make sense to ship admixtures to various corners of the country from Nagpur. So the attempt has been to concentrate on areas where you are getting traction which as I said have been eastern India and southern India and to focus more on products and introducing newer products where the competitive intensity is much less. So they are in the process of commissioning maybe by the end of the month or early September, a new product line, which is Ms.
Polymers, where they face competition from only two multinationals and there are hardly any Indian manufacturers manufacturing that. And these products are used in the same infrastructural projects where they are supplying other materials and they have been focusing on other. So you know, they’re looking along with the top line, they’re also looking at the bottom line. And I think when we did the acquisition 2 1/2 years ago, their top line was about 41, 42 crores which last year was about 62 or 63 crores or something. And I think they hopefully will be somewhere in the 70 to 75 crore range in this current fiscal.
So again the effort is grow but grow profitably. And I think we are quite happy with the path that they are shocking out for themselves.
Ketan R. Chheda
Okay, thank you sir for the detailed response. Wish you all the best.
operator
Thank you. The next question comes from the line of Mr. Aniruddha Joshi from ICICI Securities. Please go ahead.
Aniruddha Joshi
Yeah, two questions, one on Apple Chemie. Any thoughts in terms of acquiring the remaining 49% stake, that is one. And secondly now some of the products are launched under Indigo brand as well. So whether it is launched through the Indigo that is listed entity itself or it is launched through Apple Kimi means I mean to say whether Indigo brand is getting used in Apple KME’s products and distribution also. So that is question one and question two. Now two plants will come up means will commence production in next six months, water based as well as solvent based.
So any strategy that you can indicate in terms of while the production might be ready, but what will be the saving and distribution strategy at least in northern India for these two plants? Yeah, thanks.
Srihari Santhakumar
So on Apple Chemie, all the waterproofing and construction chemical products that are launched in the retail space are manufactured at Indigo Paints factories. They are branded as Indigo and they are sold through the Indigo Paints network. They have nothing to do with Apple Chemie except that there was a transfer of technology which took place from them immediately post the acquisition. So the products that Apple Chemie sells, it sells in its own name and there is no use of the Indigo branding as far as their products are concerned which are entirely B2B. Your earlier question about acquiring the remaining 49%.
Well those call options that we have kick in only after 1st of April next year. So there’s plenty of time to think about it and I think we’ll take an educated decision at that point in time as to how much to acquire more and if to acquire more and how to do that acquisition. And sorry, what was your next question on on the new plants coming up? So see you set up more capacity and more modern plants to cater to the future. And our present capacity at Jodhpur, which largely feeds north and East India was under stress and those were plants that had been set up many, many years ago and were really not designed for the capacity at which we are operating now.
So the new plant coming up does result in an increase in capacity, but more than that it results in a lot of modernization and mechanization which is very essential at the scale of operation at which which we are operating. However, as we have always said in this industry, capacity does not mean sales. So building capacity is totally agnostic of what will happen on the sales front. Sales front. Even now without those capacity coming, if we can increase sales we would happily increase sales and we do have the capacity to cater to it in some form or the other.
So it will just ease out the process. By the time that plant comes up, that future production and dispatch related things will become much more streamlined because of more automation and mechanization. So we had set up a very modern plant in Tamil Nadu which got commissioned about 21 months ago and we are reaping the benefits of that. And similar plant is coming up in North India. The place where it will make a material difference is solvent based paints which so far were manufactured only in Tamil Nadu. And from a freight viewpoint it was a little inefficient to cater to the entire country for solvent based paints from one plant located in the southern corner of India.
And therefore the solvent based plant coming up at Jodhpur will definitely mean a reduction in our freight cost as far as catering to that part of the business is concerned.
Aniruddha Joshi
Okay, sure sir. This is very helpful. Many thanks.
Srihari Santhakumar
Thanks.
operator
Thank you. Ladies and gentlemen. We’ll take this as the last question for today. I will now hand the conference over to the management for closing comments.
Srihari Santhakumar
Okay, thanks Amya. Thanks ICICI for hosting the call and thank you all for being patient listeners. Look forward to interacting with you again after three months and hopefully under much happier circumstances, both for Indigo paints and the entire paint industry. Thank you all.
operator
Thank you on behalf of ICICI securities limited. That concludes this conference. Thank you all for joining us. And you may now disconnect your lines.