'Add' Finolex Industries Shares Maintains PL Capital, Revises Target Price — Here's Why

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PL Capital Report

We upward revise our FY26E/FY27E earnings estimate of Finolex Industries Ltd. by 7.1%/5.7% and maintain ‘Accumulate’ rating with revised target price of Rs 228 (Rs 217 earlier), based on 20x FY27E earnings plus valued stake in the group listed entity Finolex Cables at 50% discount to consensus target market value.

We recently met the management of Finolex Industries to gauge volume growth outlook, market share dynamics, PVC resin availability, and price trends post DGTR’s final findings on anti dumping duty on PVC resin.

The company reiterated its 10% volume growth guidance in pipes and fittings for FY26 and expects margin improvement ahead.

We believe Finolex stands to benefit from-

1. imposition of ADD on PVC resin given its backward integration,

2. GST rate revision on agri pipes,

3. expanding dealer/distribution network, and

4. gradual expansion in P&F capacity.

We estimate revenue/Ebitda/PAT CAGR of 9.9%/16.9%/27.6% for FY25-27E with P&F volume CAGR of 9.2% and Ebitda margin of 13.0% by FY27E. Maintain ‘Accumulate’.

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