Prabhudas Lilladher's research report on Finolex Industries
We remain positive on Finolex Industires (FNXP)’s volume growth and healthy margin with PVC-EDC spread for near term, post our recent management meeting. FNXP will continue to focus on maintaining its leadership position in agri. pipe market and Q4/Q1 being seasonally strong quarters for agri-pipe volumes will benefit the company, in our view. Also, higher PVC-EDC spread (in range of USD600-650/MT) will help in maintaining EBITDA margin between 16-17%.
Outlook
We expect Sales/EBITDA/PAT CAGR of 7.7%/31.9%/25.6% over FY23-25E and arrive at SOTP based TP of Rs224 (unchanged; valuing business at 21x FY25 EPS). Maintain ‘BUY’.
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