Accumulate Finolex Industries; target of Rs 197: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Finolex Industries with a target price of Rs 197 in its research report dated July 20, 2023.

Broker Research

July 21, 2023 / 19:23 IST

accumulate

26 Aug, 2025 12:21

Volume

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Prabhudas Lilladher's research report on Finolex Industries

FNXP reported robust volume growth of 28% in its seasonally strong quarter. The company indicated 15% volume growth guidance for rest of the year from agri/non agri pipes and fittings segment, with additional improvement from newly commissioned facility. However, the PVC-EDC spread, which was USD 468/MT in Q1FY24, had an impact on FNXP's margin (EBIT/Kg was Rs 12.5). The spread has since increased to USD 540/MT in Jul-23 and management expects EBIT per Kg of Rs 14-15 for FY24. Considering decent volume growth guidance and lower EBIT per Kg guidance, we have downwardly revised our FY24 earnings by 6.3% and made minor adjustments for FY25.

Outlook

We now estimate Revenue/EBITDA/PAT CAGR of 9.2%/64.8%/51.7% for FY23-25E with P&F volume CAGR of 13.2% and EBITDA margin of 14.2%/15.2% for FY24E/FY25E. As a result of our adjustments, we have tweaked the TP to Rs 197 (Rs194 earlier), based on 18x FY25E EPS plus 50% discount to Finolex Cables’ stake. Maintain ‘Accumulate’ rating.

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