- Financial Performance:
- Revenue increased by 15% YoY but declined by 3.42% QoQ.
- PAT decreased by 29% YoY and 20% QoQ.
- PAT margin reported at 9.6% compared to the previous 15.3%.
- One-Time Impact on PAT:
- Last year’s Q2 had a one-time gain in tax of INR 16.2 Cr, impacting the YoY comparison.
- Operational Highlights:
- Indigo Paints is growing 3-4 times faster than the industry rate.
- Higher growth observed in Tier 1 and Tier 2 cities compared to Tier 3 and Tier 4.
- Gross Margin and Production:
- Gross Margin (GM) is 45.2%, benefiting from stable raw material prices.
- Addition of 457 tinting machines, bringing the total to 9,114.
- Commercial production has commenced at the water-based plant in Tamil Nadu.
- Depreciation and Expansion:
- Increase in depreciation due to the commissioning of the new plant in Tamil Nadu affecting PAT.
- Work initiated for water and solvent-based plants in Jodhpur.
- Sales Force and Depots:
- Expansion of the sales force across the country to boost Apple Chime sales.
- Opened two depots, one each in East and West India.
- Regional Dynamics:
- Muted demand observed in Kerala for the last two quarters.
- Sales in other states helping maintain the topline despite Kerala’s subdued performance.
- Dealer Dynamics:
- Dealers enjoy high margins due to less intensive distribution, with each dealer having reduced competition.
- Tinting machines for Indigo Paints are compact and embedded, providing convenience.
- Strategic Acquisition:
- Apple Chime, a B2B player acquired by Indigo Paints.
- Expansion plans for Apple Chime’s topline growth of 45-50% in the current fiscal year.
Indigo Paints navigates through varied market conditions, focusing on operational efficiency, expansion, and strategic acquisitions to maintain its growth trajectory. The company’s emphasis on geographical expansion, innovative products, and streamlined distribution contributes to its competitive edge in the industry.
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