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IDBI Capital Report
Finolex Industries Ltd. shares may remain in focus after IDBI Capital retained its 'Hold' rating on the plastic building materials company and revised its target price to ₹183 from current levels of around ₹164, implying an upside potential of 11.3%.
The brokerage maintained a cautious stance after Finolex Industries reported a weaker-than-expected performance in the June quarter, with sharp volatility in PVC prices disrupting demand and channel inventory movement. IDBI Capital said the company's Q1FY27 results missed its estimates across key parameters, primarily due to a sharp decline in pipe volumes.
For Q1 FY27, net sales fell 15% year-on-year to Rs 883.6 crore, while sales volumes declined 27% to 67,699 metric tonnes. However, improved realisations helped partially offset the demand slowdown, with net sales realisation increasing 15.3% year-on-year to Rs 131 per kg.
Despite weaker revenue, profitability improved. Ebitda rose 13.9% year-on-year to R 106.6 crore, while Ebitda margin expanded 309 basis points to 12.1%, aided by softer raw material costs and tighter cost controls. Net profit increased 16.7% year-on-year to R 114.5 crore, supported by higher other income.
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