Stock To Buy: Sharekhan Recommends Paints Stock, Expects 68% Jump In Shares

Sharekhan has recommended investors to buy Indigo Paints Ltd with a target price of Rs 2250 and a potential return of 68%. Revenue and PAT of Sharekhan's Consumer Universe grew by 17% and 11%, respectively (excluding Asian Paints and ITC, universe revenue and PAT growth stood at 13% and 2.6%, respectively); OPM fell by 71 BPS, affected by raw-material inflation and higher media spends. Check key takeaways below:

1. Indigo Paints Stock Performance

The current market price of Indigo Paints is Rs 1341 with a gain of 1% till afternoon trade. The stock's 52-week high is quoted at Rs 2320 apiece and 52-week low is quoted at Rs 1313 apiece, respectively.

2. Indigo Paints Return

The stock has declined 57% in last 5-years, 39% in last 1-year, and 14% in last 6-months. It has fallen 20% in last 3-months. The stock gained a little over 1% in last 1-week.

3. Outlook Of Consumer Goods Sector

Most of the key input prices such as crude oil/crude derivatives, palm oil and vegetable oil, packaging cost, and other key input prices (excluding dairy and wheat prices) have corrected from their high and would help the companies to post sequential margin improvement from Q3FY2023. Companies will continue to maintain higher investments behind brands and ad-spends are expected to remain high in the quarters ahead, according to Sharekhan's report. 

4. Valuation

According to Sharekhan, "We have broadly maintained our earnings estimates for FY2023 and FY2024 and will keenly monitor performance in the coming quarters."

5. About Indigo Paints

Started in the year 2000, Indigo Paints had a modest beginning. It started out with the manufacture of lower-end Cement paints, and gradually expanded its range to cover most segments of water-based paints like Exterior Emulsions, Interior Emulsions, Distempers, Primers, etc.

From an early age, the Company spread its footprints across the country, with the rapid expansion of its reach across India. Today the company stands out as one of the strongest contenders in the Indian paint industry, being rated as an innovative paint manufacturer, which keeps coming out with unique products never before offered in the country, according to its official website.

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.