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IDBI Capital Report
The brokerage firm IDBI Capital has maintained a ‘Hold' rating on Finolex Industries Ltd. with a revised target price of Rs 207, implying limited upside from current levels.
Despite subdued demand, Finolex Industries delivered a notable operational beat in the March quarter. Revenue rose 12.1% YoY to Rs 13.1 billion, supported by improved realisations, even as volumes remained largely flat due to weakness in the agricultural segment.
The company is gradually diversifying its product mix to reduce agri-dependence, with the agricultural segment share declining from 67% in FY25 to 63% in FY26, while the non-agricultural segment continues expanding.
Further, the management noted that the fittings segment is currently growing at a rate of 9%-10%, while the overall CPVC portfolio is expanding at a steady pace of approximately 8% to 9% annually.
The brokerage has marginally revised its margins estimates in-line with the management guidance. Maintains Hold with revised target price of Rs 207, assigning 20x PER on FY28E.
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