Indigo Paints’ profit falls 45.9% to 13.8 crore rupees in second quarter
Key Facts
Indigo Paints’ standalone net profit fell 45.9% year on year to 13.8 crore rupees in the quarter ended September 30, 2026, from 25.5 crore rupees in the year-earlier period, according to the company’s official results statement. The decline came despite a 14.1% increase in standalone revenue from operations to 340.5 crore rupees, from 298.5 crore rupees a year earlier. The results highlight a widening gap between sales growth and profitability in the second quarter of fiscal 2027. Standalone earnings before interest, tax, depreciation and amortization, excluding other income, also fell 33.8% to 30.3 crore rupees from 45.8 crore rupees. In early trading on November 2, the stock fell more than 12% after the company reported lower net profit and operating earnings, according to a Business Upturn report; the report did not specify that the move occurred immediately after the announcement.
The company said an unfavorable product mix and raw-material cost pressures affected gross margins, as it used high-cost inventory carried over from the previous quarter. Standalone gross margin contracted to 38.5% in the second quarter from 45.1% in the same period of the previous fiscal year. The company also said the unfavorable mix increased discounts, causing gross revenue growth of 18.8% to exceed net revenue growth of 14.1%. As a result, some of the growth in gross sales was reflected in higher discounts before net revenue was recorded. The company said, "An unfavorable product mix and raw-material cost pressures from high-cost inventory carried over from the previous quarter affected gross margins."
Category data showed diverging trends across products: the value of sales of putty and cement paints rose 12.6%, while volume fell 0.2% during the quarter. By contrast, emulsion sales volume grew 10.4%, while sales value for the category increased 13.3%, according to the investor presentation. These figures offer a different view of category performance within total sales, as value growth in putty and cement paints coincided with a slight decline in volumes. The company also said advertising and promotion expenses rose to 18.3 crore rupees, from 15.7 crore rupees in the second quarter of fiscal 2026. It attributed increased pressure on operating earnings to higher spending on media and on-ground outreach activities.
On a consolidated basis, Indigo Paints reported revenue of 358.8 crore rupees in the quarter ended September 30, up 15.0% from the year-earlier period, while consolidated net profit fell 47.0% to 13.4 crore rupees. The consolidated and standalone results are different measures, but both showed rising revenue alongside falling profit. The company said its subsidiary Apple Chemie posted consolidated growth of 35.3% during the quarter. In the first half of fiscal 2027, standalone revenue rose 16.4% to 690.5 crore rupees, and standalone net profit increased 8.3% to 56.2 crore rupees, according to the investor presentation. The first-half figures put the quarterly decline in the context of a longer period in which the company recorded year-on-year growth in standalone revenue and profit.
The company’s board approved the unaudited results on October 30, 2026, according to a company disclosure. The company scheduled its second-quarter results discussion call for November 2 at 11:00 a.m. India time, with investors and analysts, and said it would include management discussion and a question-and-answer session. In the investor presentation, management said it expects sales growth and product mix to improve in the second half of fiscal 2027 as the distributor network recovers. It added that earnings before interest, tax, depreciation and amortization margins are expected to return to normal levels in the third and fourth quarters. These expectations put the next two quarters at the center of monitoring the impact of high-cost inventory and the trajectory of product mix and margins, according to the company’s presentation.