Finolex Industries Q1 Results Review - Mixed Bag; Aims Low 10-15% Pipe Volume Growth In FY25: Systematix

Systematix Report

Finolex Industries Ltd. mixed bag Q1 (revenue down 3% YoY, 15% miss on our estimate; Ebitda up 36% YoY (inline) with 18.1% margin] was driven by 2% YoY dip in pipe volume (15% miss) and 51% surge in PVC resin volume. Better realization in both segments drove Ebitda.

Profit after tax surged to Rs 5 billion owing to Rs 4.17 billion net gain from sale of a lease land parcel. Pipe and Fitting volume was impacted by lower offtake in the agri segment (supply chain issue) while non-agri saw decent growth (inline with industry; 30% mix, aim to reach 50% in few years).

Pipe Ebit margin (11.9%, up 90 basis points YoY; Rs 14.8/kg, up 8% YoY and 12% QoQ) was aided by richer product mix (non-agri pipe, fittings), better operational efficiency and reduction in discounts. There was no inventory gain during Q1.

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