Finolex Industries Shares Drop As Q4 Revenue Misses Estimates

The company's revenue declined by 28.44% year-on-year to Rs 1,141.1 crore in the fourth quarter.

<div class="paragraphs"><p>Sewerage pipes manufactured by Finolex Industries Ltd. (Source: Company website)</p></div>
Sewerage pipes manufactured by Finolex Industries Ltd. (Source: Company website)

Shares of Finolex Industries Ltd. dropped the most in five months on Tuesday after the company's fourth-quarter revenue missed estimates despite a profit beat.

The company's revenue declined by 28.44% year-on-year to Rs 1,141.1 crore in the fourth quarter. This compares with the revenue of the same period in the previous fiscal, which stood at Rs 1,594.6 crore, according to its exchange filing. It missed the consensus analyst estimates pooled by Bloomberg, which stood at Rs 1,321.1 crore.

Its net profit was also down 66.37% year-on-year to Rs 166.5 crore, compared with Rs 495.7 crore in the same period a year ago. However, it beat analyst estimates, which stood at Rs 137.8 crore.

Finolex Industries Ltd. said in its investor presentation that it has seen a strong profit improvement during the quarter in both the PVC pipes and fittings and PVC resin segments. PVC pipes and fittings volume registered a growth of 4% year-on-year to 81,452 MT, and PVC resin volume decreased 27% year-on-year to 58,132 MT.

Ajit Venkataraman was appointed as the chief executive officer of the company for a period of five years with effect from June 1, 2023, which is subject to the approval of the board at the annual general meeting.

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Finolex Industries Q4 FY23 (Consolidated, YoY)

  • Revenue down 28.44% at Rs 1,141.1 crore versus Rs 1,594.6 crore, against the Bloomberg estimate of Rs 1,321.1 crore.

  • Ebitda down 17.85% at Rs 217.4 crore versus Rs 263.7 crore; analysts had estimated Rs 177.1 crore.

  • Ebitda margin at 19.06% versus 16.6%, compared to a forecast of 13.4%.

  • Net profit down 66.4% at Rs 166.5 crore versus Rs 495.7 crore, against an estimate of Rs 137.8 crore.

  • The company had benefited from exceptional gains to the tune of Rs 376.1 crore in the year-ago period. The board declared a final dividend of Rs 1.50 per share for fiscal 2023.

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Shares of Finolex Industries Ltd. fell as much as 5.68% intraday before paring losses and trading 2.83% lower, compared to a 0.43% advance in the benchmark NSE Nifty 50 as of 10:12 a.m.

Total traded volume stood at 5.5 times its 30-day average. The relative strength index was at 58.6.

Out of the 18 analysts tracking the company, 12 maintain a 'buy' rating, four recommend a 'hold,' and two suggest to 'sell' the stock, as per Bloomberg data.

The average calculated from the 12-month price target given by analysts implies a potential upside of 6.9%.

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