Finolex Industries Q2 Results Review - Dismal Performance On Key Parameters: IDBI Capital

IDBI Capital Report

Finolex Industries Ltd.'s Q2 FY24 result was below our estimates on key parameters. Lower PVC prices dented net sales realisation, while subdued volume growth weighed on overall Q2 FY24 earnings.

The management remained optimistic on sales volume pickup in H2 FY24 aided by better monsoon and overall demand improvement. Net sales was down by 6.2% YoY to Rs 8.8 billion, while Ebitda came in at Rs 1 billion, down by 172.2% YoY.

Finolex Industries reported adjusted net profit of Rs 0.9 billion, declined by 202.7% over Q2 FY23. The company has healthy cash balance of Rs 15 billion which would be utilised for capacity addition in near term.

The company’s focus on increasing share of non-agri products in total sales bodes well for margin improvement.

We have maintained our earnings estimates for FY24E/FY25E. Maintain 'Hold' with a target price of Rs 205 assigning 20 times price-to-earnings ratio on FY25E.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.