Finolex Industries Q2 Operating Profits doubles to Rs125.4cr

Finolex Industries reported marginal growth of 1.57% in top line sales for the Sep-20 quarter at Rs585.78cr. The operating profits for the quarter ended Sep-20 doubled to Rs125.43cr

Oct 26, 2020 06:10 IST India Infoline News Service

Finolex
Finolex Industries reported marginal growth of 1.57% in top line sales for the Sep-20 quarter at Rs585.78cr. The operating profits for the quarter ended Sep-20 doubled to Rs125.43cr while the net profits were up by 19.6% at Rs122.83cr on a yoy basis. The lower net profit growth in the Sep-20 quarter was due to a huge deferred tax credit in Sep-19 quarter.


This had significant impact on the margins of Finolex Industries. For the Sep-20 quarter, the operating profit margins or OPM nearly doubled to 21.41% on the back of favorable inventory movement in the latest quarter. Net profit margins or NPM for the quarter also expanded by over 300 bps at 20.97%.
Financial highlights for Sep-20 compared yoy and sequentially


Particulars Sep-20 Quarter Growth (yoy) Growth (qoq)
Total Revenues Rs585.78cr +1.57% +4.22%
Operating Profit Rs125.43cr +100.37% +79.37%
Net Profits Rs122.83cr +19.60% +116.56%
Key Ratios Sep-20 Quarter Sep-19 Quarter Jun-20 Quarter
Diluted EPS Rs9.90 Rs8.30 Rs4.57
Operating Margins 21.41% 10.85% 12.44%
Net Profit Margin 20.97% 17.81% 10.09%


Key takeaways from the Sep-20 quarter results

  • In terms of segmental revenues, PVC pipes & fittings accounted for 60% of the revenues for the Sep-20 quarter while PVC accounted for the balance sales revenues. The profit margins are much higher on PVC than on PVC fittings.
  • The net cash flows generated from operations were down by nearly 14% at Rs187cr in the first half of the FY21 ending in Sep-20. This was largely due to net impact of the unfavourable impact of trade receivables and trade payables.
  • The company largely caters to the agricultural segment and the industrial sewage segment and while industrial demand had been tepid, the agricultural demand continued to be robust on the back of a good Kharif this year.

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