Finolex Industries Stock Gains Most Since May 2013 After Q3 Results

Shares of Finolex Industries Ltd. gained the most in more than seven years after the maker of PVC pipes and fittings beat analysts' estimates in the quarter ended December.

The company's net profit more than doubled over the year earlier to Rs 259.4 crore in the October-December period, according to an exchange filing. That compares with the Rs 138.8-crore consensus estimate of analysts tracked by Bloomberg.

Its revenue rose 53% to Rs 1,066.9 crore, compared with the predicted Rs 895.5 crore. Higher volumes in PVR pipes and fittings, and the PVC resin segment aided the top line.

• Volumes for PVC pipes and fittings business rose 4.7% year-on-year to 55,299 MT
• PVR resin volumes increased 14.5% to 67,741 MT.

“During the quarter, PVC prices touched historic highs on account of numerous global supply-side constraints,” Finolex said in its investor presentation.

• Operating profit, or earnings before interest, tax, depreciation and amortisation, more than doubled over the year earlier to Rs 346.6 crore, against Rs 195.6-crore estimate.
• Ebitda margin expanded to 32.5% from 19%.

The company also announced a split of one equity share of Rs 10 each into two equity shares of Rs 5 each. It expects to complete the process of the stock split over the next three to four months.

Shares of Finolex Industries gained as much as 16.2% as of 10:40 a.m.—the biggest single-day rally since May 2013—to Rs 689 apiece. That is also the highest level since February 2018.

Of the 18 analysts tracking the company, 17 recommend a ‘buy', while one suggests a ‘hold'. The average of Bloomberg consensus 12-month price target implies an upside of 15.3%.