Indigo Paints Limited (BSE: 543258 | NSE: INDIGOPNTS), a decorative paints manufacturer, reported a 11.2% year-on-year rise in third-quarter profit, aided by improved operating margins, lower advertising spends and easing raw material prices, even as revenue growth remained moderate.
The company has a pan-India presence across 28 states, supported by five manufacturing plants, and over 19,000 active dealers and 55 depots. The company focuses on differentiated products, premiumization and expansion into construction chemicals through its subsidiary Apple Chemie India Ltd.
Q3 Profit Rises 11% on Margin Expansion
- Indigo Paints reported a 11.2% year-on-year rise in standalone Q3 FY26 profit to ₹40.5 crore (excluding exceptional items), supported by improved operating efficiencies and lower advertising spends.
- Revenue from operations rose 3.5% to ₹338.9 crore.
- EBITDA increased 14.5% to ₹65.6 crore, with EBITDA margin expanding to 19.4% from 17.5% a year earlier.
- Gross margin remained strong at 47.1%, sustaining its industry-leading position among listed peers.
Nine-Month Performance Shows Steady Gains
- For 9M FY26, revenue rose 2.4% to ₹932.2 crore.
- PAT increased 6.2% to ₹92.4 crore, while EBITDA grew 6.4% to ₹155.0 crore.
- EBITDA margin improved to 16.6% from 16.0% last year.
- The company booked a one-time gratuity provision of ₹5.85 crore during the quarter linked to the draft Labour Code impact. Excluding this, PAT margin stood at 11.8% in Q3 versus 11.0% a year earlier.
Cost Control and Advertising Rationalization Drive Margins
- Advertising and promotional (A&P) expenses declined to 5.6% of revenue in Q3 FY26 from 8.2% last year. For 9M FY26, A&P stood at 5.9% versus 7.0%.
- Management attributed margin gains to better cost discipline, favourable product mix and raw material prices reverting to pre-COVID levels, enabling improved discounts while sustaining gross margins.
Segment Performance: Enamels Lead Growth
- Enamels & wood coatings: Value growth 18.9%, volume growth 20.2%
- Primers, distempers & others: Value growth 12.5%
- Putty & cement paints: Value growth 5.5%
- Emulsions: Marginal value growth, volume decline
- The company noted moderated sales in October 2025, followed by double-digit growth from November onwards.
Distribution Expansion and Pan-India Presence
- Indigo expanded its dealer network to 19,134 active dealers, supported by 55 depots and over 11,900 tinting machines. A new depot was opened in Uttar Pradesh to enhance service efficiency.
- The company operates across 28 states with five manufacturing plants and continues to deepen penetration in Tier 1–4 cities.
Adjacency Growth Through Apple Chemie India Ltd
- Apple Chemie, focused on construction chemicals and waterproofing, posted Q3 revenue of ₹20.0 crore versus ₹15.2 crore a year earlier.
- Nine-month revenue rose to ₹47.6 crore.
- The subsidiary commenced production at its Nagpur sealant plant, launched retail waterproofing products under the Indigo brand and is exploring export opportunities.
Capacity Expansion and Sustainability Initiatives
- The company is in the final stages of commissioning a 90,000 KLPA water-based plant, expected by June 2026. Production has also begun at its solvent-based and brownfield putty plants.
- On ESG, Indigo commissioned 330 kW solar panels at its Kochi facility and expanded healthcare and skill-development programs for over 36,000 painter families.
Outlook: Margin Improvement Expected in FY26
The company expects improved sales momentum to continue, with EBITDA margins projected to strengthen in FY26 due to better demand, improved product mix and benign raw material prices. A&P spending as a percentage of revenue is expected to decline for the full fiscal year.
Key Takeaway
Despite modest revenue growth, Indigo Paints delivered double-digit profit expansion and meaningful margin improvement, reflecting strong cost management, premiumization strategy and growing contribution from construction chemicals.