Indigo Paints zoomed 15.7 per cent to a high of Rs 2,247 in intraday trades on the BSE on Friday on the back renewed buying interest at the counter.
The stock had recently hit a fresh 52-week low of Rs 1,900 on December 27, 2021, and was down a whopping 43.2 per cent from its 52-week high of Rs 3,348 touched on February 03, 2021.
Brokerage firm Motilal Oswal has initiated a coverage on the stock with 'Buy' rating and price target of Rs 2,270. The brokerage report states that Indigo has successfully surpassed the high entry barriers of the Indian Paints industry through its patient strategy compromising of – differentiated products, building distribution network via the rural markets and high investments in branding among others.
The report further states, that the Rs 545 billion paint industry is expected to post around 12 per cent cAGR over FY19-24E, driven by urbanization, the shortening of the repainting cycle, growth in branded players and robust pricing power of the branded players.
"We expect Indigo Paints to deliver a sales/ EBITDA/ PAT CAGR of around 28 per cent/ 35 per cent/ 41 per cent over FY21-24E", the report added.
As of 09:50 am, the stock was up 13.5 per cent at Rs 2,205, with trades of around 6,500-odd shares on the BSE. In comparison, the BSE Sensex had gained 0.7 per cent at 58,229.