Shares of Indigo Paints jump 15% after getting BUY rating from Motilal Oswal, is this an investment opportunity for you?

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Indigo Paints Shares: Indigo Paints shares saw a tremendous rise on Friday. Shares of Indigo Paints rose 15.7% to Rs 2,247 during intraday trading on the BSE. Shares of Indigo Paints recently touched Rs 1,900 level on December 27, its lowest level in the last 52 weeks. Also, it was down 43.2% from its 52-week high. The share price of Indigo Paints touched Rs 3,348 on February 3, 2021, its 52-week high. Brokerage Motilal Oswar recently started covering the stock by giving it a ‘BUY’ rating and has a target price of Rs 2.270. The brokerage had said that Indigo Paints has overcome the challenges of entry barrier in the Indian paint industry. The brokerage said Indigo Paints has benefited from offering a differentiated product from rival companies, building a distribution network in rural India and investing more in branding. The brokerage further said that the total turnover of the paint industry is around Rs 545 billion and is expected to grow at an annual rate of around 12 per cent from FY 2019 to 2024. Brokeren said, "We expect Indigo Paints sales to grow at an annual rate of around 28%, EBITDA 35% and Profit After Tax (PAT) at 41% for FY21-2024."

At around 1:30 pm, the stock of Indigo Paints was trading at Rs 2,139.30, up 10.07 per cent on the NSE. However, the year 2021 has not been good for the company and it has given a negative return of 31.44 per cent to its investors. ,

Usama Younus

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