Shares of Finolex Industries slumped 6 percent on May 23 as a decline in sales and profit disappointed investors. At 12:44pm, the stock was quoting at Rs 182.60, down 4.30 percent.
Consolidated revenue of the PVC pipes and fittings manufacturer has fallen 28 percent to Rs 1,141.1 crore, while net profit also tanked 66 percent to Rs 166.5 crore. EBITDA was down 18 percent YoY at Rs 217.4 crore, whereas operating margin expanded to 19.06 percent in the March quarter as against 16.6 percent a year back.
According to Prabhudas Lilladher, stability in poly vinyl chloride (PVC) resin prices helped improve the company’s quarterly performance. Yet the company a posted lower volume growth of 3.6 percent in its seasonally strong quarter as compared to Astral, Supreme, Apollo which saw a volume growth of 15 percent, 14.6 percent, and 13.9 percent, respectively.
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Segment wise, revenue from PVC Resin was at Rs 501 crore during the March quarter, while Pipes and Fittings (P&F) sales stood at Rs 1,102 crore.
“After a subdued volume growth in last three years, stabilisation in prices has led to a strong pent-up demand. The momentum is expected to sustain in the long run with the overall growth prospects in the rural and the real estate sector of the country. The company has witnessed a strong financial performance on full year basis, marking a new milestone achievement of record sales volume growth,” Prakash P Chhabria, Executive Chairman of Finolex Industries, said.
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