Indigo Paints (INDIGOPNTS)

FairStock Score: 35/100 — MIXED

Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Very low leverage with Debt/Equity of 0.02 and a solid Piotroski F-Score of 7/9
• Promoter holding of 53.88% aligns management with minority shareholders
• Profit growth of 10.61% is outpacing sales growth, indicating some operating leverage
• ROCE of 19.51% and ROE of 15.22% are reasonable returns on capital
• Latest quarter net margin of about 10.6% shows acceptable profitability

Concerns

• Sales growth is weak at just 3.47%, suggesting limited demand momentum
• Valuation is expensive: P/E of 29.95 and PEG of 4.25 offer no margin of safety
• P/B of 4.29 against a book value of ₹205 implies a heavy premium for moderate returns
• Dividend yield of 0.37% is negligible, and FairStock Score of 19/100 flags the stock as risky

AI Analysis

At ₹878.95, Indigo Paints is a business that I want to like, but Benjamin Graham would ask: where is the margin of safety? The balance sheet is clean — debt/equity of 0.02 and a Piotroski F-Score of 7 out of 9 tell me the company is not financially fragile. Promoter holding of 53.88% is another positive; owners still have skin in the game. Return on equity of 15.22% and ROCE of 19.51% are respectable, though not exceptional, and they suggest decent capital allocation. But the growth story is muted. Sales grew only 3.47%, which is far from a compounding machine. Profit growth of 10.61% is better, but the market has already priced that in — and more. At a P/E of 29.95 and a PEG of 4.25, the valuation assumes a much faster future than the recent past. The price-to-book of 4.29, against a book value of ₹205, means you are paying more than four times the net asset base for a business earning moderate returns. The latest quarter shows sales of ₹339 Cr and net profit of ₹36 Cr, roughly a 10.6% margin. That margin is okay, but not wide enough to signal a deep moat in a market ruled by much larger rivals. The dividend yield of 0.37% gives you almost nothing while you wait. The stock has fallen from its 52-week high of ₹1,345 to ₹879, so it may look like a bargain. However, a falling share price only creates opportunity if the intrinsic value is clear. With a FairStock Score of 19/100, I would rather keep this on the watchlist. In Graham's words, price is what you pay; value is what you get. Right now, I don't see enough value for the price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer