For the October-December quarter (Q3FY21), Finolex Industries' net profit had more-than-doubled to Rs 256 crore on the back of strong revenue growth. The plastic products company had posted a profit of Rs 93 crore in the year-ago quarter.
Total income from operations increased 52.5 per cent year-on-year (YoY) to Rs 1,067 crore as against Rs 699 crore in Q3FY20. Ebitda (earnings before interest, taxes, depreciation, and amortisation) jumped 150 per cent YoY to Rs 347 crore while margins improved to 32.52 per cent from 19.88 per cent in the previous year quarter.
The management said a decent monsoon and subsequent increase in area under Rabi crop sowing are encouraging signs to expect higher demand on the agri side. The management also believes that some of the key initiatives announced by the government such as a boost to the housing sector by extension of tax holiday, higher impetus on Jal Jeevan Mission, enhancement of agricultural credit and increased provision for rural infra development fund will go a long way in revival and sustainability of PVC pipes sector.
Analyst at Edelweiss Broking remains positive on Finolex Industries
because of it having higher exposure to the rural market, which is performing better, and expected traction in market share gains in the pipes and fittings segment. Margins are sustaining at elevated levels on account of higher PVC-EDC spreads, and this trend should remain for at least the next couple of quarters, the brokerage firm said in its December quarter results update.
At 11:22 am, the stock was trading 3 per cent higher at Rs 143.50 on the BSE as compared to a 0.90 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped three-fold with a combined 1.2 million equity shares having changed hands on the BSE and NSE so far. Average sub 300,000 shares were traded daily in the past two weeks before the stock split.
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