Accumulate Finolex Industries; target of Rs 229: Prabhudas Lilladher

Prabhudas Lilladher recommended Accumulate rating on Finolex Industries with a target price of Rs 229 in its research report dated February 10, 2025.

Broker Research

February 11, 2025 / 11:52 IST

accumulate

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Finolex Industries

P&F reported modest volume increase of 5.5% YoY due to weak season for agri business and delays in ADD on PVC resin prices. The company has guided single digit volume growth for FY25, which leads to high single digit volume growth in Q4FY25. The management indicated double digit volume growth for FY26, with improvement in margins as competitive prices will improve with demand and normalization in channel inventory. EBIT/kg for the P&F segment moderated at Rs3.7 with lower PVC-EDC spread at USD 517/MT and 5.1% YoY lower realization. The correction in realization was mainly due to discounts and correction in RM prices. We estimate revenue/EBITDA/adj PAT CAGR of 6.1%/6.8%/10.9% for FY24-27E with P&F volume CAGR of 7.6% and EBITDA margin of 13.8% by FY27E.

Outlook

We have downward revised our earnings estimates for FY26E/FY27E by 4.8%/4.9% and maintain ‘Accumulate’ rating with revised TP of Rs229 (Rs270 earlier), based on 20x FY27E earnings (earlier 22x) plus valued stake in the group listed entity Finolex Cables at 50% discount to consensus target market value.

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