Indigo Paints Ltd

Message

Encouraging business performance

On a consolidated basis, our topline growth of 21.68% for the fiscal year FY24 significantly outpaced the low single digit industry average growth; and have achieved a total net revenue of H 1,30,609 Lakhs. Our consolidated EBITDA for the full year expanded by 31.14% to H 23,807 Lakhs in FY24. This robust performance can be attributed to our strategic initiatives, product innovations and strong brand equity enabling us to capture a larger market share, despite moderate demand.

On a standalone basis, our focus on operational efficiencies and cost optimisation measures converted into increased profit margins, with EBITDA margins expanding over 150 basis points to 18.54% for FY24. Additionally, our PAT for the full year rose to H 14,865 Lakhs and PAT margin was

11.72%, despite a significantly higher depreciation burden in the second-half of the year. This reflects our ability to manage expenses and drive bottom-line growth effectively.

During FY24, we demonstrated prudent fiscal management by reducing our overall advertising and promotion (A&P) expenditure as a percentage of revenue from 7.70% in FY23 to 7.36% in FY24. Our fiscal position remains strong, underpinned by healthy cash flows and disciplined working capital management. Our robust balance sheet continues to position us for long-term sustainable growth.

Our operational excellence is reflected by strong double-digit growth across all four segments. The synchornised growth in value and volume across all categories, reflects our dedication to margins sustainable and balanced business development.

Strategic priorities

Our strategic priorities are centred around driving product innovation, geographic expansion and capacity augmentation to fuel our future growth trajectory. We are developing differentiated products that cater to evolving consumer preferences, enabling us to gain market share in the highly competitive decorative paint industry. Additionally, our focus on inorganic growth initiatives will further diversify our product portfolio, strengthening our market position.

Geographical expansion is a key area of focus for us, with concerted efforts to deepen our presence in Tier I and Tier II cities. We are solidifying our engagement with painters and contractors and leveraging their expertise and reach to penetrate new markets. In addition, we are investing in capacity expansions, with civil works underway for new water-based and solvent-based paint plants in Jodhpur, alongside plans to double our putty manufacturing capacity at the existing facility. These investments will enhance our production capabilities and assist us to meet the growing demands through our diverse product offerings.

Our expansion initiatives have played a pivotal role in strengthening our market presence and enhancing operational capabilities. With an active dealer base of 18,105, we have expanded our reach and fortified our distribution network, enabling us to cater to diverse customer segments effectively. Moreover, the addition of approximately 1,600 tinting machines has empowered our dealers to offer a wider range of colour options, catering to evolving consumer preferences. Furthermore, the establishment of six new depots has optimised our supply chain, ensuring timely delivery and improving our service standards across the country.

Our focus on waterproofing and construction chemical products has yielded positive results, contributing in mid-single-digit to our revenue share Q4 FY23-24, with strong sales traction across multiple states. Moreover, we continue to invest in brand building through advertising and promotion campaigns, enhancing brand equity and strengthening our market position.

Products diversity

Our portfolio of differentiated and innovative products have been a key driver of our growth, contributing disproportionately to our gross margin. As the first Company to introduce category-creator products such as Metallic Emulsions, Tile Coat Emulsions, Bright Ceiling Coat Emulsions and Floor Coat Emulsions in the Indian decorative paint market, we have established ourselves as industry pioneers. Furthermore, our basket of unique offerings, including Dirtproof and Waterproof Exterior Laminate, Exterior and Interior Acrylic Laminate and PU Super Gloss

Enamel, has enabled us to provide value-added properties, thereby enhancing our brand equity and customer loyalty.

Focus on brands and outreach

Our brand and marketing strategies are pivotal in driving consumer awareness and engagement. We are ramping up our salesforce to strengthen our on-ground presence and deepen relationships with customers. Additionally, we are stepping up brand promotion activities and collaborating with influencer communities to amplify our brand's reach and resonance. Additionally, we are increasing customer engagements through digital channels, leveraging the power of technology to connect with our audience.

Recognizing the growth potential in adjacent segments, we are expanding our footprint beyond the decorative paint market. Our foray into construction chemicals and waterproofing solutions presents a significant opportunity to diversify our revenue streams. Moreover, through our subsidiary, Apple Chemie India Pvt. Ltd, we are tapping into the high-growth infrastructure segment in India. This move enables us to capitalise on the burgeoning infrastructure development in the country, positioning us for sustainable long-term growth.

Broadening our sustainability initiatives

As responsible corporate citizens, we are improving our environmental, social and governance (ESG) performance. We have undertaken several sustainability initiatives, including deployment of electric vehicles for last-mile delivery to reduce our carbon footprint. We have also planned to install solar panels at our existing manufacturing facilities and head office to promote green energy. An emission reduction target has been set with the Science-Based Targets initiative, demonstrating our dedication to combating climate change to the best of our abilities.

Our CSR efforts are focused on empowering communities and providing essential services. We have extended educational assistance to over 300 underprivileged girls in and around Pune. In Kochi, we have partnered with Cancure Foundation to provide free dialysis and palliative care to the underprivileged sections of society. Additionally, we have extended health insurance coverage to over 1,000 families of the painter community in Bihar and are expanding this initiative to cover 1,600 more families in Odisha and Chhattisgarh, highlighting our resolve towards community welfare.

Way forward

Our esteemed customers have made us an industry-leading brand and we are grateful to them for being supportive of our innovative initiatives. We are committed to drive forward our vibrant innovation engine to strengthen our market reputation and recall. We have an ambitious capex plan and our commissioned infrastructure is anticipated to be sufficient to cater to the upcoming demand for the next five years.

Powered by the dedicated effort of our teams and our customer-centric strategies, we are well positioned for growth in a favourable macro environment characterised by fast urbanisation and a growing aspirational demography with higher disposable income.

In conclusion, I express my gratitude to our stakeholders for their continued support and faith in Indigo Paints. Together, we will seize opportunities to build a stronger and more vibrant future for all stakeholders.