Indigo Paints Limited has received a GST demand order of INR 19.26 crores, including interest and penalty, from the Assistant Commissioner of State Tax, Pune. The order pertains to input tax credit availed on IPO-related expenses.

Key Details of the GST Demand

Company's Financial Position

Despite the GST demand, Indigo Paints maintains a strong financial position. The company's latest balance sheet data reveals:

The company's robust financial position, with growing assets and equity, suggests it is well-equipped to handle the GST demand without significant operational disruption.

Implications and Next Steps

1. Appeal Process: Indigo Paints' decision to appeal the order with the Goods and Service Tax Appellate Tribunal indicates the company's confidence in its position regarding the input tax credit on IPO expenses.

2. Financial Prudence: The company's statement that there is no immediate financial impact demonstrates its preparedness for such regulatory challenges.

3. Investor Confidence: The transparency in disclosing this development aligns with good corporate governance practices, which may help maintain investor confidence.

4. Industry Implications: This case may set a precedent for how GST authorities view input tax credits on IPO-related expenses, potentially affecting other companies planning to go public.

As the situation develops, investors and industry observers will be keenly watching the outcome of Indigo Paints' appeal and its potential implications for the broader market.

Indigo Paints , a key player in the Indian paint industry, is showing signs of resilience and growth amid challenging market conditions. The company's Q2 FY26 performance and recent market indicators suggest a positive outlook for the coming quarters.

Q2 FY26 Performance Highlights

Indigo Paints reported a steady performance in Q2 FY26:

The company maintained its leadership in gross margins, which expanded to 45.10% from 44.10% in the same quarter last year.

Market Recovery Signals

Hemant Jalan, Chairman and Managing Director of Indigo Paints, expressed optimism about the market's recovery:

• Unprecedented levels of token scanning by painters and contractors, indicating strong secondary sales.
• Excellent fund inflow from dealers, suggesting successful inventory liquidation.
• Improved consumer sentiment driven by factors such as good monsoon, income tax reductions, and lower GST rates.

Product Performance

• Emulsions and enamels categories showed healthy growth in both volume and value terms.
• Premium products outperformed, contributing to higher value growth compared to volume growth.
• Waterproofing and construction chemical products continued to show phenomenal growth.

Strategic Initiatives

1. Dealer Network Expansion: The company has over 18,900 active dealers and more than 11,650 tinting machines as of September 30, 2025.
2. Capacity Expansion: New solvent-based and water-based plants in Jodhpur are nearing completion, set to enhance production capabilities.
3. Apple Chemie Subsidiary: The construction chemicals subsidiary is expanding its presence beyond Maharashtra, entering new markets like Madhya Pradesh, Tamil Nadu, Assam, and Bihar.

Outlook

Indigo Paints anticipates a strong recovery in the coming quarters, with expectations of double-digit growth by Q4 FY26. The company remains focused on executing better strategies, tailoring offerings to dealer and influencer needs, and maintaining financial discipline.

Mr. Jalan stated, "We are very hopeful that we'll come back to you at the end of the present quarter with significantly better numbers. And hopefully, the industry as a whole will also be back on track with good growth numbers in the days to come."

As the paint industry shows signs of revival, Indigo Paints appears well-positioned to capitalize on the improving market conditions and continue its growth trajectory.