Finolex Industries Q2 Review - Insipid Result; Future Demand-Margin Scenario Remains Healthy: ICICI Securities

"BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.Finolex Industries Ltd. has reported a tepid Q2 FY24 pipe volume growth of 6.2% YoY (-31.7% QoQ, four-year compound annual growth rate of 7.0%) on a low base due to lukewarm demand from agriculture segment (60% volume mix in Q2). Consolidated Ebitda margin contracted 127 basis points QoQ to 11.7% (versus Ebitda loss of ~Rs 1.4 billion YoY) due to lower profitability in pipes segment (Ebit/kg down 21.7% QoQ to Rs 10.7). Finolex Industries' profitability for pipes was lower QoQ due to significant decline in volumes resulting in negative operating leverage. Management has guided for pipe volume growth of 15-20% YoY in FY24 as PVC prices have now stabilised (post Rs 10 decline in October 2023-to-date). It has guided for Ebit/kg in resin at Rs 7-8 and for pipes at Rs 10-12 in FY24. We cut our profit after tax estimates for FY24E by ~5% (FY25E, FY26E remain broadly unchanged) and maintain 'Buy' with a rolled over SoTP-based December 2024E target price of Rs 237 (versus Rs 230 earlier)..Click on the attachment to read the full report:.Finolex Industries Q2 Results Review - Dismal Performance On Key Parameters: IDBI Capital.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Finolex Industries Q2 Review - Insipid Result; Future Demand-Margin Scenario Remains Healthy: ICICI Securities

Tepid pipe volume growth of 6.2% YoY in Q2.

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Finolex Industries Q2 Review - Insipid Result; Future Demand-Margin Scenario Remains Healthy: ICICI Securities

Tepid pipe volume growth of 6.2% YoY in Q2.

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