Key Events This Week
16 Feb: Stock opens strong at Rs.987.35 (+1.51%) amid positive technical momentum
17 Feb: Mixed technical signals emerge as momentum shifts sideways; stock closes at Rs.979.30 (-0.82%)
18 Feb: Formation of Death Cross signals potential bearish trend; price slips to Rs.974.55 (-0.49%)
19 Feb: MarketsMOJO downgrades stock to Sell amid weak technicals and flat financials; stock closes at Rs.965.25 (-0.95%)
20 Feb: Stock falls sharply to Rs.944.95 (-2.10%) despite Sensex gains
16 February: Positive Start with 1.51% Gain
Indigo Paints began the week on a relatively strong note, closing at Rs.987.35, up 1.51% from the previous close. This gain outpaced the Sensex’s 0.70% rise to 36,787.89, reflecting initial optimism. The volume of 87,833 shares indicated decent investor interest. The stock’s intraday volatility suggested some buying support, although it remained well below its 52-week high of Rs.1,345.00.
17 February: Mixed Technical Momentum Leads to Slight Decline
On 17 February, the stock reversed course, closing at Rs.979.30, down 0.82%. This followed a day marked by mixed technical signals as the momentum shifted from mildly bearish to sideways. Despite an intraday high of Rs.1,020.30, the stock failed to sustain gains amid low volume of just 3,926 shares. The Sensex continued its upward trend, gaining 0.32% to 36,904.38, highlighting the stock’s underperformance relative to the broader market.
18 February: Death Cross Formation Signals Bearish Outlook
The formation of a Death Cross on 18 February marked a pivotal technical event, where the 50-day moving average crossed below the 200-day moving average. This bearish signal coincided with a 0.49% decline in the stock price to Rs.974.55 on very low volume of 1,020 shares. The Sensex advanced 0.43% to 37,062.35, further emphasising Indigo Paints’ relative weakness. Technical indicators such as the weekly MACD and Bollinger Bands confirmed the deteriorating momentum, suggesting potential further downside.
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19 February: Downgrade to Sell Amid Weak Technicals and Flat Financials
MarketsMOJO downgraded Indigo Paints from Hold to Sell on 18 February, citing deteriorating technical indicators and flat financial performance. The stock closed at Rs.965.25 on 19 February, down 0.95%, with volume rising modestly to 3,165 shares. The downgrade reflected concerns over sluggish growth, with net sales CAGR at 4.72% over five years and operating profit growth at just 2.19%. Return on capital employed (ROCE) stood at a low 17.95%, while cash reserves contracted to Rs.9.10 crores. Valuation metrics showed a price-to-earnings ratio of 31.17, below the paints industry average of 50.67, but an elevated PEG ratio of 4.3 suggested limited growth prospects.
20 February: Sharp Decline Despite Sensex Gains
The week ended with a sharp 2.10% decline to Rs.944.95 on 20 February, on heavy volume of 103,903 shares. This drop contrasted with the Sensex’s 0.41% gain to 36,674.32, underscoring the stock’s continued underperformance. Technical momentum remained firmly bearish, with daily moving averages below key levels and Bollinger Bands indicating downward pressure. The stock hovered near its 52-week low of Rs.900.05, raising caution about further downside risk in the near term.
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Daily Price Performance vs Sensex
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-16 | Rs.987.35 | +1.51% | 36,787.89 | +0.70% |
| 2026-02-17 | Rs.979.30 | -0.82% | 36,904.38 | +0.32% |
| 2026-02-18 | Rs.974.55 | -0.49% | 37,062.35 | +0.43% |
| 2026-02-19 | Rs.965.25 | -0.95% | 36,523.88 | -1.45% |
| 2026-02-20 | Rs.944.95 | -2.10% | 36,674.32 | +0.41% |
Key Takeaways
1. Technical Momentum Shifted Bearish: The week saw a clear transition from sideways to bearish technical momentum, highlighted by the Death Cross formation on 18 February and confirmed by bearish MACD and moving averages. This shift signals increased downside risk in the medium term.
2. MarketsMOJO Downgrade to Sell: The downgrade reflected deteriorating technicals and flat financial trends, including sluggish sales growth and low returns on capital. The Mojo Score fell to 44.0, underscoring the cautious stance.
3. Underperformance vs Sensex: Indigo Paints declined 2.85% over the week while the Sensex gained 0.39%, continuing a pattern of relative weakness across multiple time frames, including a 21.42% drop over the past month.
4. Valuation and Financials: Despite a lower P/E ratio than the industry average, the elevated PEG ratio and flat profit growth raise questions about the stock’s growth prospects. Cash reserves have contracted, though debt remains low.
Conclusion
Indigo Paints Ltd’s performance this week was marked by a clear deterioration in technical momentum and a significant downgrade in analyst sentiment. The stock’s decline of 2.85% contrasted sharply with the Sensex’s modest gains, reflecting company-specific challenges amid a difficult sectoral environment. The formation of the Death Cross and bearish technical indicators suggest that the stock may face further pressure in the near term. Flat financial performance and valuation concerns compound the cautious outlook. Investors should monitor key technical levels and fundamental developments closely as the stock navigates this challenging phase.
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