Finolex Inds

Finolex Industries hit a new 52-week high on the back of its exuberant numbers for Q4FY13 wherein net sales  at Rs.624 was up 6% (YoY) but the surge in net profit was much sharper, up 41% at Rs.79 crore. This higher rise in net profit was on account of backward integration of PVC raw materials. EBIDTA was up 35% at Rs.128 crore and the best part were the EBIDTA margins, which came in at 20.4% v/s 16.01% (YoY). The best part about the company is that it has a backward integration for its  raw material supply for its pipes manufacturing plants, making it completely self sufficient – right from raw-material to finished product.  

The superb margins were also on account of the falling raw material prices, which declined 10% at Rs.388 crore. What has also helped is the brining down of interest cost; it has come down 58% at Rs.19 crore. Its debt currently stands at around Rs.1000 crore and in FY13, it managed to bring it down by Rs.250 crore and in current fiscal, it plans to bring it down by Rs.100 crore. Its 30,000 MT pipes plant has been commissioned in March 2013 and this is expected to start adding to the margins in current fiscal. Margins are expected to be better than the current 20% in FY14.