Indigo Paints targets end-November Jodhpur plant startup

Indigo Paints Limited began trial production at its 90,000-kilolitre-a-year water-based paint plant in Jodhpur in September 2026 and management said it hopes the facility will be fully operational by the end of November. The plant is intended to add supply capacity and improve responsiveness for premium water-based paints in North, East and Central India.

What is the capacity and status of Indigo Paints’ Jodhpur water-based plant?

Indigo Paints’ new Jodhpur water-based plant has annual capacity of 90,000 kilolitres and entered trial production in September 2026. Management described it as a new facility for water-based products, separate from the solvent-based plant and expanded putty plant at Jodhpur that had begun production before the end of the previous fiscal year.

The facility expands Indigo Paints’ manufacturing base at a time when its distribution network covered 19,730 active dealers, more than 12,700 tinting machines and 56 depots as of September 30. Those channels operated across 28 states and were supplied by six manufacturing plants, including the new Jodhpur water-based unit during its trial phase.

Management said the Jodhpur water-based plant should provide substantial incremental capacity once it is fully operational. The stated focus is premium water-based products, rather than the putty and cement-paint category, whose Q2 FY27 volumes were broadly flat and declined marginally by 0.2% despite 12.6% value growth.

When will Indigo Paints’ Jodhpur plant begin full operations?

Indigo Paints said it hopes the water-based plant will be fully operational by the end of November 2026, not December 2026. The December date disclosed on the call relates to the expected completion of 1,200 kilowatts of solar commissioning at the new Jodhpur plant, rather than the production ramp-up target.

The distinction matters because the September 2026 trial-production milestone and the end-November operating target concern manufacturing output, while the solar project is a separate sustainability installation. Indigo Paints said its installed solar capacity stood at 350 kilowatts across Pune and Cochin, with the Jodhpur project expected to take total installed capacity above 1,500 kilowatts by December 2026.

Management did not provide a quarterly volume target, utilisation rate, investment amount or revenue contribution for the 90,000-kilolitre facility. It also did not set out a month-by-month production schedule beyond stating that trial production began in September and that it hoped to achieve full operations by the end of November.

How could the Jodhpur plant change Indigo Paints’ supply chain?

Indigo Paints said the Jodhpur plant should materially improve supply-chain responsiveness in North, East and Central India once it is fully operational. The company added a fourth Rajasthan depot in Bikaner during Q2 FY27 and said it was considering opening another two to three depots in Q3 and Q4 to improve service efficiency.

The combination of local manufacturing capacity and additional depots indicates that the company is seeking faster product availability across markets served from western India. However, management did not quantify expected freight savings, delivery-time reductions or inventory changes from the Jodhpur plant or the planned depot additions.

The plant’s water-based focus also aligns with a category where Indigo Paints identified premiumisation as a priority. Emulsions, the company’s biggest category, recorded 13.3% value growth and 10.4% volume growth in Q2 FY27, although management said the quarter’s sales mix was skewed towards lower-end emulsions, as is typical during the monsoon period.

That mix shift had financial consequences in the quarter. Stand-alone gross margin fell to 38.5% in Q2 FY27 from 45.1% a year earlier, while management attributed part of the decline to product mix and the larger portion to high-cost raw-material inventory bought in the prior quarter. The Jodhpur project itself was not presented as a remedy for those input-cost effects.

What does the new capacity mean for Indigo Paints’ growth plans?

Indigo Paints said the new capacity supports its aim of serving growing demand for premium water-based products in three regions, but management gave no explicit sales forecast tied to the plant. Its stand-alone revenue from operations rose 14.1% year on year to Rs 340.5 crore in Q2 FY27, while first-half revenue rose 16.4% to Rs 690.5 crore.

Management said it wants to grow significantly faster than the market, deepen underpenetrated geographies and build portfolio premiumisation. In response to an analyst, it said its broad aspiration had been to grow at 1.5 to 2 times industry growth, rather than the 2 to 3 times cited by the analyst, but it declined to issue a numerical growth forecast because of geopolitical instability.

The regional supply objective comes as Indigo Paints continues to invest in its market reach. It had set up 19 Indigo Color Canvas stores by September 30 and spent Rs 18.3 crore on advertising and promotion in Q2 FY27, equal to 5.4% of revenue, compared with Rs 15.7 crore in the year-earlier quarter.

Management said the higher advertising and promotional spending was directed to media and below-the-line engagement with painters and contractors. It retained this spending despite lower quarterly profitability, saying brand-investment returns are built over years. The company also said its painter health-benefit programme covered more than 30,000 painter families and its SkillUp programme had trained more than 2,300 painting professionals.

How does the plant launch fit with Indigo Paints’ current financial position?

Indigo Paints is bringing the Jodhpur facility closer to full operations after a quarter in which revenue expanded but profitability fell. Q2 FY27 stand-alone earnings before interest, tax, depreciation and amortisation, or EBITDA, declined 33.8% year on year to Rs 30.3 crore, and the EBITDA margin fell to 8.9% from 15.3%.

Management said most of the pressure came from high-cost raw-material inventory purchased in March and April 2026 that was expensed in Q2, after lower-cost inventory had benefited Q1. It said the pass-through of the higher-priced inventory was largely complete by August and that gross and EBITDA margins returned close to normal from September, although this was management’s expectation rather than reported Q3 performance.

For the first half of FY27, the comparison was less severe. Stand-alone EBITDA increased 3.2% to Rs 92.3 crore, even as the margin declined to 13.4% from 15.1% in the prior-year half. Profit after tax rose 8.3% to Rs 56.2 crore, with the margin at 8.0% compared with 8.6% a year earlier.

The new plant therefore arrives alongside a plan to improve both regional service and second-half operating performance. Management expects gross margins to improve substantially from Q3 onwards and expects EBITDA margins to normalise during Q3 and Q4, supported by inventory calibrated to market conditions and a recovery in gross margin.

Conclusion

The Jodhpur facility links Indigo Paints’ premium water-based portfolio with a larger regional manufacturing base and planned distribution additions. Its 90,000-kilolitre annual capacity is intended to support North, East and Central India, while the company’s Q2 FY27 operating performance remained affected by higher-cost raw-material inventory and a less favourable product mix.

The next points to watch are whether the plant reaches management’s end-November operating target, whether 1,200 kilowatts of Jodhpur solar capacity are completed by December 2026, and whether planned additions of two to three depots in Q3 and Q4 improve service efficiency. Management also expects margin normalisation in the second half after Q2 FY27 EBITDA margin fell to 8.9%.