Finolex Industries Q2 Results Review - Lower Pipe Realisation Hurt; Aims 15%+ Volume Growth In H2: Systematix

Systematix Report

Finolex Industries Ltd. weak Q2 (revenue/Ebitda/Profit after tax down 6%/90%/58% YoY) was impacted by lower pipe realisation (down 13% YoY) despite an inline pipe volume (up 10% YoY).

Management expects a rebound in pipe volume in 2H (15- 20% YoY growth), after a low 3% growth reported in H1, and maintains 10%+ growth guidance given earlier for FY25.

Sharp downtrend in PVC prices (from Rs 96 to 77 /kg) in June and July impacted pipe realization (down 13% YoY) and margins (Rs 385 million Ebit loss).

No inventory loss was booked as it was carrying very low inventory. Steady PVC price since August 2024 augurs well industry volume and margins. With regular expansion in distribution network, Finolex Industries aims non-agri mix to reach 50% in few years from ~30% currently.

Government authorities are scheduled to meet on December, 24, 2024 to decide on imposing 'Add' on PVC import.

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