Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/indigo-paints" target="_blank" data-smartkarma-citation="entities:31308:1" rel="noopener">Indigo Paints (IP IN)</a> , a paints company based out of India, has hit primary markets recently. The deal specifics and valuations are well covered by Insight Provider <a href="https://www.smartkarma.com/profiles/sumeet-singh" target="_blank" data-smartkarma-citation="accounts:4" rel="noopener">Sumeet Singh</a> in his insights <a href="https://www.smartkarma.com/insights/indigo-paints-ipo-growing-fast-but-future-growth-won-t-come-as-easy" target="_blank" data-smartkarma-citation="insights:47157" rel="noopener">Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy</a> and <a href="https://www.smartkarma.com/insights/indigo-paints-ipo-not-leaving-a-whole-lot-on-the-table" target="_blank" data-smartkarma-citation="insights:47184" rel="noopener">Indigo Paints IPO - Not Leaving a Whole Lot on the Table</a>.
More specifics on geographical spread and valuations are also covered by <a href="https://www.smartkarma.com/profiles/mio-kato" target="_blank" data-smartkarma-citation="accounts:713" rel="noopener">Mio Kato</a> in his insight <a href="https://www.smartkarma.com/insights/indigo-paints-ipo-tinting-on-up" target="_blank" data-smartkarma-citation="insights:47197" rel="noopener">Indigo Paints IPO – Tinting on Up</a>.
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This insight focusses on takeaways from channel interactions on Indigo's product differentiation strategy. Our takeaways are based on our interactions about the company's products with industry professionals with more than 15 years of experience in the paint industry, independent dealers and large scale commercial real estate developers.
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Indigo Paints (IP IN) , a paints company based out of India, has hit primary markets recently. The deal specifics and valuations are well covered by Insight Provider Sumeet Singh in his insights Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy and Indigo Paints IPO - Not Leaving a Whole Lot on the Table.
More specifics on geographical spread and valuations are also covered by Mio Kato in his insight Indigo Paints IPO – Tinting on Up.

This insight focusses on takeaways from channel interactions on Indigo's product differentiation strategy. Our takeaways are based on our interactions about the company's products with industry professionals with more than 15 years of experience in the paint industry, independent dealers and large scale commercial real estate developers.


Indigo Paints (IP IN) | Channel Interactions Suggest a Differentiated Strategy

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Indigo Paints has been growing at a stellar pace within Indian market after expanding production capacity through the acquisition of facilities in Kerala and Tamil Nadu. The company also offers a relatively unique strategic take on the market, differentiating itself from the top four, Asian Paints, Berger Paints, Kansai Nerolac Paints and Akzo Nobel India. The question is how sustainable the growth in market share will be.

Indigo Paints has been growing at a stellar pace within Indian market after expanding production capacity through the acquisition of facilities in Kerala and Tamil Nadu. The company also offers a relatively unique strategic take on the market, differentiating itself from the top four, Asian Paints, Berger Paints, Kansai Nerolac Paints and Akzo Nobel India. The question is how sustainable the growth in market share will be.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Indigo Paints (IP) aims to raise around US$160m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.I've covered the background and company performance in my previous insight, <a href="https://www.smartkarma.com/insights/indigo-paints-ipo-growing-fast-but-future-growth-won-t-come-as-easy" target="_blank" rel="noopener">Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy</a>.In this insight, I'll talk about earnings forecast and valuations.

Indigo Paints (IP) aims to raise around US$160m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.I've covered the background and company performance in my previous insight, Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy.In this insight, I'll talk about earnings forecast and valuations.

Indigo Paints IPO - Not Leaving a Whole Lot on the Table

Indigo Paints (IP) aims to raise around US$165m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.Revenue from operations have grown at 41.9% CAGR over FY10-19 and 24.7% CAGR over FY18-20. Margins have been on an uptrend as well and hence, over FY18-20, gross profit grew at 36% CAGE, EBITDA at 87.8% and PATMI at 92.8%. The company has adopted a strategy of targeting smaller cities and rural areas to build its dealer network and then work its way up to the larger cities. It also claims to have introduced a host of differentiated products which have helped in brand building.IP aims to expand its distribution network further, and is focusing on installing tinting machines. However, it hasn’t been able to ramp-up the installation per year. In addition, some of the margin gains recorded over 6M21 might not be sustainable.

Indigo Paints (IP) aims to raise around US$165m in its India IPO. It is engaged in the business of manufacturing paints in India. It was the fifth largest company in the Indian decorative paint industry, in terms of revenue from operations in FY20 and was the fastest growing among the top five paint companies.Revenue from operations have grown at 41.9% CAGR over FY10-19 and 24.7% CAGR over FY18-20. Margins have been on an uptrend as well and hence, over FY18-20, gross profit grew at 36% CAGE, EBITDA at 87.8% and PATMI at 92.8%. The company has adopted a strategy of targeting smaller cities and rural areas to build its dealer network and then work its way up to the larger cities. It also claims to have introduced a host of differentiated products which have helped in brand building.IP aims to expand its distribution network further, and is focusing on installing tinting machines. However, it hasn’t been able to ramp-up the installation per year. In addition, some of the margin gains recorded over 6M21 might not be sustainable.

Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy

India

Rallis India Limited manufactures and exports chemicals and allied products. Through its subsidiaries, the Company produces pesticides, fertilizers, textiles and garments, marine products and leather tanning materials.  Rallis also provides farm advisory services.

National Fertilizers Limited manufactures and markets chemical fertilizers, in addition to providing a number of other chemicals and by-products. The Company also supplies a number of allied services, which help to educate farmers on the use of fertilizers, agricultural equipment and machines, purity seeds, pesticides and fungicides.

Dhanuka Agritech Ltd. manufactures insecticides, pesticides and other chemicals. The Company has a technical tie-up with M/s E.I. Dupont De Numours & Co., U.S.A. to formulate the product Methomyl 12.5L under brand name "Dunet".

Responsive Industries Limited develops a wide range of flooring products. The Company's products range from vinyl flooring to rigid PVC.

Balaji Amines Ltd. manufactures methylamines, ethylamines, and derivatives of specialty chemicals and natural products. The Company supplies its products to c ompanies in the pharmaceutical and pesticide industries in India and elsewhere t hroughout the world.

Sudarshan Chemical Industries Limited manufactures color pigments, which are used in paints, printing inks, plastics, rubber artist materials, and textile printing.  The Group also manufactures a basic range of pesticides.

Kama Holdings Ltd. provides real estate and education services. The Company rents real estate properties, provides education services, and invests in shares.

NOCIL Ltd. manufactures a wide variety of petrochemicals, agrochemicals, rubber chemicals and their intermediates. The Company's products include azodrin, phosphamidon, high density polyethylene, special grade polypropylene and polymer alloys and blends.  NOCIL also manufactures ethyl vinyl acetate, processed polyethylene, oxygen and nitrogen.

GHCL Ltd manufactures various kinds of chemicals.  The Company's products include soda ash, edible salt, bromides and liquid bromine.  Gujarat Heavy Chemicals also manufactures yarn.

Gulf Oil Lubricants India Ltd. manufactures and markets lubricating oils and greases for distribution throughout India. The Company supplies its lubricants to automobile and tractor manufacturers in India and also manufacturers lubricant application solutions.

LOTTE Fine Chemical Co., Ltd. produces general and fine chemicals. The Company produces ammonia, epichlorohydrin, caustic soda, and dimethylformamide. LOTTE Fine Chemical also manufactures chemicals used in pharmaceutical and paint manufacturing areas.

Sinofert Holdings Ltd. manufactures and distributes fertilizers. The Company produces and imports potash fertilizers, phosphate-based and nitrogen-based fertilizers, and compound fertilizers.  Sinofert operates in the Peoples Republic of China.

SK KAKEN CO., LTD. manufactures and sells paints primarily for construction. The Company also paints buildings.  SK Kaken also operates overseas, especially in Southeast Asia.

Sichuan Lutianhua Co., Ltd. manufactures and markets a variety of fertilizers and industrial chemical products.  The Company's products include urea, liquified ammonium, and methyl alcohol.

FUSO CHEMICAL CO., LTD. manufactures fruit acid and its salts.  The Company also produces resin additives, fine chemical products, and silica related derivatives.

Halex Holdings Bhd manufactures agricultural chemicals.  The Company produces herbicides, insecticides, fungicides, fertilizers and related products.

NIPPON PILLAR PACKING CO., LTD. manufactures industrial-type mechanical seals. The Company also produces fluorine resin products, packing materials, and gaskets.

Pengxin International Mining Co., Ltd. is a mining exploration company. The Company acquires, explores and develops properties for copper and cobalt resources.

Pengxin International Mining C (600490 CH)

Shandong Jincheng Pharmaceutical Group Co., Ltd. manufactures pharmaceuticals. The Company produces and sells cephalosporin pharmaceuticals, biopharmaceuticals, anti-infective basic drugs, and more. Shandong Jincheng Pharmaceutical Group markets its products throughout China.

Shandong Jincheng Pharm And Chem (300233 CH)

T. HASEGAWA CO., LTD. manufactures fragrances for cosmetics and toiletries. The Company also produces flavorings for beverages and food products.

Indigo Paints Limited manufactures paints. The Company supplies exterior and interior paints. Indigo Paints serves customers in India.

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Indigo Paints (INDIGOPN IN)

Indigo Paints (IP IN) | Channel Interactions Suggest a Differentiated Strategy

We interact with distributors, paint industry professionals and real estate developers to understand Indigo Paints product differentiation...

Pranav Bhavsar

Indigo Paints IPO – Tinting on Up

Indigo Paints offers a very interesting growth profile combined with some tantalising potential for margin expansion. The question is, does this...

Mio Kato

Indigo Paints IPO - Not Leaving a Whole Lot on the Table

Indigo Paints (IP) aims to raise around US$160m in its India IPO. It was the fifth largest company in the Indian decorative paint industry and was...

Sumeet Singh

Indigo Paints IPO - Growing Fast but Future Growth Won’t Come as Easy

Indigo Paints aims to raise around US$165m in its India IPO. Revenue grew at 41.9% CAGR over FY10-19. Over FY18-20, Revenue grew at 24.7% CAGR,...

Sumeet Singh

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