Finolex Industries Limited (Finolex) reported better than expected numbers at EBITDA and PAT levels in Q1FY19. Standalone revenue was up 13% yoy (2% qoq) at Rs828cr, lower than the consensus estimate of Rs893cr. EBITDA witnessed 48% growth yoy (3% qoq) at Rs194cr, while EBITDA margin expanded 554bps yoy (20bps qoq) to 23.4%. EBITDA and EBITDA margin surpassed consensus estimates of Rs164cr and 18.3%, respectively. Standalone PAT (adjusted for exceptional expenses) stood at Rs131cr, up 65% yoy (9% qoq), surpassing the consensus estimate of Rs101cr.
Volume growth for the pipes and fittings segment was 9% yoy at 77,636MT in Q1FY19. Consequently, revenue for the segment was up 5% yoy at Rs723cr. However, the PVC resin segment registered 5% yoy revenue decline to Rs504cr. This was due to volume decline of 9% yoy.
Both segments reported robust growth in margins. The PVC resin segment saw a margin of 25.5% in Q1FY19, implying margin expansion of 670bps yoy (170bps qoq). The PVC pipes and fittings segment reported EBIT margin of 9.2%, implying margin expansion of 450bps yoy (flat qoq).
The numbers for this quarter had exceptional expenses worth Rs28cr, for the settlement of derivative claims against the company disclosed as contingent liability as of March 31, 2018. Reported PAT for the quarter (including exceptional expenses) was Rs103cr, which was still above the consensus estimate.
Finolex Industries Ltd ended at Rs. 594.50, down by 0.15 points or 0.03% from its previous closing of Rs. 594.65 on the BSE.
The scrip opened at Rs. 595 and touched a high and low of Rs. 603.85 and Rs. 590 respectively. A total of 19,768 (NSE+BSE) shares were traded on the counter. The stock traded below its 200 DMA.
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