Indigo Paints: Upcoming Star

Cheers. You are right regards a lot of b2c. However, it’s not just consumers in b2c and there is a mix of b2b in there as well. In our client list for eg most of the revenue and recurring orders come from hotels and building complexes and colleges etc. These would still be consumers at the end of the day… So they’d be listed under b2c. These projects can lead to huge amount of money so every company Ie Akzo, Asian, berger etc go through long bidding wars here and usually the final decision by these businesses is based on good quality that will last a long while at low price. For the bigger clients the marketing teams of these companies come down and take us out to dinner and make a case for their product. And we meet them on our trips so I’m pretty close with the marketing teams of these companies and they tend to tell me about their struggles/competition/targets etc so maybe I’m a bit disillusioned about this space a bit .

Also, it’s quite rare to deal directly with a final customer here. Usually it’s the interior designer /architect or painter. And it’s easier to set up deals with them since they usually buy on credit… So the dealer has the power to recommend the products he has in stock or wants to push since he would be the one risking it all by giving it out on credit.That being said… This is just one shop in a big city that is run more as a legacy to grandparents + pay salaries of staff that have been there for decades + sponsor our trips across the world. There’ll be huge differences across India in different dealerships for sure.

Sidenote : The first time I saw the books I nearly fell off my seat since the dealership is almost like an nbfc… Giving out credit to a list of 300 or so clients per year and then needing to plan out npas and harass clients for collections and hoping they all pay lol. I know our competitors(other dealers) compete with us by giving longer credit cycles too. So we have to buy our products with cash in advance and then give it out to clients at razor thin margins. The beneficiary in this are the paints companies since they don’t have to work like and nbfc while we do lol. So while I wouldn’t ever invest in a dealership of my own I’ve also seen good things and seen the wealth this industry can create and how they can pass on costs to us and the customers easily too with no risk of collections.

Also, it’s not easy to switch to a different supplier so even with loads of capital I don’t see grasim being a huge success straight off. With the competition as high as it is the fact these companies still make such huge profits is amazing and I don’t see that changing anytime soon.

Hence why I’ve begun investing at these levels in indigo since I like their business model ie differentiated products + rural to city and the fact they’ve managed to grow even with this competition from nothing in just 20 years (even though we don’t stock them and tbh they haven’t even approached us yet in our city).

Disc: Invested. Not a sebi advisor. I am just drawing from first hand experience… But that may be a very microscopic view. Please flag of this isn’t adding value to the thread since it’s more about dealerships than the actual company