Finolex Industries Shares Drop The Most In Five Months As Q4 Revenue Misses Estimates

Shares of Finolex Industries Ltd (FINPIPE). dropped the most in five months after the company’s fourth-quarter revenue missed estimates despite profit beat.

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 board at the Annual General Meeting.

The company’s revenue declined by 28.44% year-on-year to Rs 1,141.06 crore in the fourth quarter. This compares with the revenue of the same period in the previous fiscal, which stands at Rs 1,594.57 crore, according to its exchange filing. It missed the consensus analyst estimates pooled by Bloomberg, which stood at Rs 1,321.1 crore.

The reported net profit was down 66.37% year-on-year to Rs 166.5 crore compared with Rs 495.72 crore, in the same period a year back. The consensus of analyst estimates, pooled by Bloomberg expected profit at Rs 137.83 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.

Finolex Industries Q4 FY23 (Consolidated, YoY)

  • Revenue down 28.44% at Rs 1,141.06 crore vs Rs 1,594.57 crore (Bloomberg estimate: Rs 1,321.1 crore).
  • Ebitda down 17.85% at Rs 217.43 crore vs 263.66 crore (Bloomberg estimate: Rs 177.06 crore).
  • Ebitda margin at 19.06% vs. 16.6% (Bloomberg estimate: 13.4%)
  • Net profit down 66.37% at Rs 166.5 crore vs Rs 495.72 crore (Bloomberg estimate: Rs 137.83 crore).
  • The company had benefited from exceptional gains to the tune of Rs 376.06 crore in the year-ago period. The board declared a final dividend of Rs 1.50 per share for fiscal 2023.

Shares of Finolex Industries Ltd. fell 2.83% to Rs 185.5 apiece, as of 10:12 a.m., in trade on Tuesday compared to 0.43% advance in the benchmark, NSE Nifty 50 Index.

The stock declined as much as 5.68% intraday, falling the most in five months since Dec. 23, 2022.

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 the Bloomberg data.

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

Source: Exchange filing

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