Indigo Paints eyes ₹1,400 crore revenue in FY24, expects EBITDA margin to expand up to 150 bps

The company outperformed the industry's growth trend for the third quarter in a row with its numbers in Q3FY24. Indigo Paints’ revenue surged 25.78% to ₹353.77 crore whereas the company’s net profit rose to ₹37.26 crore, up 41.88% year-on-year.

Jalan said that the company has focused on market share expansion and it will continue efforts in this direction.

"I think we are somewhere in the region of 2.5% and 3% now and to grow incrementally in the next year to go somewhere 4% and 5% would be very ambitious and a good target to get," he said.

On being asked about the company's strategy to maximise margin, Jalan added that Indigo Paints is aiming to keep the ad spend stable, which will help to improve the margin.

"We don’t feel at this stage, dramatic increase in ad spends is going to help the company, so we are more or less keeping the ad spends constant over the last two years with a minor increase to take care of inflation, but as a percentage of top line, the ad spends drops by 150 basis points from one year to the next and that straightaway adds to our EBITDA,” he said.

According to Jalan, the company’s EBITDA margin has been climbing up almost 150 basis points YoY.

"We expect the same to happen this year, last year we closed at an EBITDA nearing 17%, and we are fairly confident that we will close this year at about 18.5%. So, I don’t see the margins coming under stress at all. In fact, the margins, EBITDA growth and even the PAT growth will continue to outperform the industry," he added.

Indigo Paints has signed former India cricket team captain MS Dhoni as its brand ambassador.

Highlighting the company’s impressive performance in gross margin, Hemant Jalan said, "I think for 15 quarters in a row, we have been the highest growth margin contributor in the industry and I see no reason why that should change in the foreseeable future."

Indigo is confident of continuing the growth as Jalan mentioned that they expect to close FY24 with a top line somewhere close to ₹1,400 crore.

“I think this year we should be at a top line of somewhere close to ₹1,400 crore or ₹1,350 to 1400 crore range as far as this year is concerned. And we could attempt to breach ₹2,000 crore mark next year. Whether we are successful in doing that or we fall a little shy of that would depend on somewhat market conditions, but if we continue to outperform the industry, then we do seek to add about ₹500 crore to our top line year on year,” Jalan said.

Indigo Paints shares closed at ₹1,452.2 per piece, up 2.31%, on BSE on Monday.