Finolex Industries Q2 Review: IDBI Capital Maintains 'Hold' Post A Mixed Bag Quarter — Check Target Price

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IDBI Capital Report

Finolex Industries Ltd.’s Q2 FY26 result was a mixed bag as net sales was marginally below our estimate, while margins were beat to our forecast.

Volume decreased by about 6% YoY mainly on account of prolonged heavy monsoon. The management anticipates a rebound in deferred demand once the monsoon recedes and does not foresee a significant overall decline in agri demand.

The company faced global structural issues in the VCM market, which it is attempting to manage through long-term contracts to ensure continued supply.

The management reiterated that the core focus remains on being a pipes and fittings producer and marketer. The long-term endeavour is to achieve a fairly good dependence on both agri and non-agri segments to manage seasonality.

The management is focused on to structure the organization to better achieve the aspirational 50% agri-50% non-agri split.

We have maintained our earnings estimates for FY26E/FY27E and reiterate Hold with a revised target price of Rs 207 (unchanged) assigning 15x PER on FY27E.

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