Indigo Paints Limited announced its Q2 FY27 results, with standalone revenues growing 14.1% year-on-year to INR340.5 crores. However, profitability was significantly impacted, with EBITDA margins falling from 15.3% to 8.9%. This decline was primarily attributed to unfavorable product mix and high-cost raw material inventory from the previous quarter. The company expects margins to recover from Q3 onwards.
Indigo Paints Q2 FY27 Performance Overview
Indigo Paints Limited has disclosed its financial results for the quarter and half-year ended September 30, 2026. The company reported a standalone revenue growth of 14.1% on a year-on-year basis, reaching INR340.5 crores for the second quarter of FY27. This top-line growth was achieved despite facing significant challenges on the profitability front.
Margin Compression and Contributing Factors
The most notable aspect of the Q2 performance was the substantial contraction in EBITDA margins, which declined from 15.3% in the same quarter last year to 8.9% in Q2 FY27. The company attributed this sharp fall primarily to two key factors:
- Unfavorable Product Mix: A shift in product mix led to higher discounts compared to the previous year, impacting net revenue realization.
- High-Cost Raw Material Inventory: The company had to expense high-cost raw materials purchased in March and April due to price shocks, which significantly weighed down gross margins.
Hemant Jalan, Chairman and Managing Director, stated that the raw material price shock, which began in March 2026 due to geopolitical events, continued to impact the cost base throughout Q2. While the industry implemented price increases of approximately 10% to 12%, raw material prices continued to fluctuate, escalating again in July and August.
Consolidated Financials
On a consolidated basis, which includes its subsidiary Apple Chemie India Limited, Indigo Paints reported a revenue of INR358.7 crores for Q2 FY27, an increase of 15% year-on-year. Consolidated EBITDA stood at INR31 crores with a margin of 8.6%, and PAT was INR13.4 crores with a margin of 3.7%.
Outlook and Future Expectations
Looking ahead, Indigo Paints anticipates a recovery in gross and EBITDA margins from Q3 onwards. The company expects to regain its leading position on gross margin percentage during the seasonally strong Q3 and Q4 quarters. The impact of high-cost raw material inventory is expected to be absorbed, providing a cleaner base for the upcoming quarters. Management expressed confidence in accelerating top-line growth in the second half of the fiscal year, driven by a strong dealer network and brand-building initiatives. Initiatives to drive disproportionate top-line growth are expected to yield results in Q3 and Q4.
Source: BSE
