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Indigo Paint Ltd.’s Q2 FY22 outcomes have been under our estimate on account of delayed monsoon withdrawal and important uncooked materials inflation. However, sharp demand revival in Kerala (Indigo’s largest market) in August-September 2021 from weak gross sales in July 2021 was encouraging.
Gross margin contracted 850 foundation factors was in keeping with Asain Paints Ltd., Kansai Nerolac Paints Ltd.
Indigo Paints applied value hikes in final 10 months to mitigate the influence and shall be taking additional value hikes in November 2021 (common ~8-9%).
Emulsion class, which contributes ~43% to topline, grew higher than different classes with worth/quantity of 41/24%.
We imagine that the margins would stay below strain within the close to time period on account of uncooked materials and excessive promoting and promotional spends, however enhance submit festive season with calibrated value move on.
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