Shares of Finolex Industries surged 9.6 percent in intra-day deals on Tuesday to their record high of ₹297.55 apiece after the firm announced its March quarter (Q4FY24) results.
The firm posted about a 2 percent year-on-year (YoY) rise in its standalone profit after tax to ₹161.43 crore in Q4FY24 on the back of higher revenues as against ₹158.35 crore in the corresponding period last year. Meanwhile, its total income from operations during the quarter under review also rose 8.27 percent to ₹1,235.42 crore versus ₹1,141.06 crore in the year-ago period.
On the operating front, the company’s EBITDA fell 3.91 percent to ₹208.93 crore in the last quarter compared to ₹217.43 crore a year ago. Meanwhile, EBITDA margin was 16.9 percent in Q4 FY24 as against 19.1 percent in Q4 FY23.
Post today’s rally, the stock has now jumped 82.5 percent from its 52-week low of ₹163, hit on June 12, 2023. It has risen over 49 percent in the last one year and 40 percent in 2024 YTD, giving positive returns in 4 of the 5 months so far. It has gained 10.5 percent in May so far after an 8 percent and 12.9 percent increase in April and March, respectively. However, it fell 2 percent in February but was up 5.7 percent in January 2024.
Prakash P Chhabria, Executive Chairman, Finolex Industries Limited, said, “PVC prices remained stable during the second half of the year, leading to a healthy demand. Our operating performance during the year has been robust and with the company’s increased focus on the plumbing and sanitation segment, the same is expected to improve further”.
Volume in the Pipes and Fittings segment during the quarter increased by 22.98 percent to 1,00,171 MT from 81,452 MT in Q4FY23. Volume in the PVC Resin segment was also up 19.07 percent to 69,215 MT in Q4FY24 versus 58,132 MT in Q4FY23.
For the full financial year FY24, Finolex Industries has reported a net profit of ₹455.30 crore, up 92.4 percent YoY and a total income of ₹4,317.43 crore, down 1.8 percent YoY.
Finolex Industries is the third-largest player in the PVC resin market and the second-largest manufacturer of PVC pipes in India. The company has four manufacturing facilities, one each in Pune, Talegaon and Ratnagiri in Maharashtra, and one in Masar, near Vadodara in Gujarat. The company is the only backward integrated player, with in-house PVC resin capacity and 43 MW captive power, aiding cost control.
Post the Q4 results, brokerage house Prabhudas Lilladher has retained it ‘hold’ call on the stock with a target price of ₹270 (CMP: ₹271.40).
PL has revised upwards the FY25/FY26E adjusted earnings by 6.9 percent/8.1 percent on account of improvement in margins with operational efficiency and stable PVC-EDC spread, which is expected to continue. The brokerage also estimates Revenue/EBITDA/PAT CAGR of 14.9 percent/21.1 percent/23.5 percent for FY24-26E with P&F volume CAGR of 13 percent and EBITDA margin of 15.1 percent by FY26E.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 14 May 2024, 01:45 PM IST