Finolex Industries: Better realisations and lower costs drive Q2FY21 operational performance

Finolex Industries today jumped nearly nine per cent to Rs 579 on delivering quarterly numbers for the period ended September 2020.

The company’s consolidated revenue for the quarter Q2FY21 came in at Rs 585.78 crore as against Rs 576.67 crore in the corresponding quarter last year, registering a 1.6 per cent YoY increase.

On the volume's front, PVC resin registered a YoY growth of 15 per cent to 47,630 MT whereas pipe & fittings registered a YoY decline of 9.2 per cent to 43,618 MT.

EBITDA for the quarter grew by 76.5 per cent YoY to Rs 144.77 crore as against Rs 82 crore in the corresponding quarter last year, with a corresponding margin expansion of 1,049 bps while EBITDA margin for the quarter stood at 24.7 per cent.

Looking at the operational performance segment-wise, PVC resin EBIT margin stood at 26.9 per cent vs 14.9 per cent in Q2FY20 while PVC pipes & fittings EBIT margin stood at 7.8 per cent vs 4.6 per cent in Q2FY20.

Significant improvement in operating performance on a YOY basis is majorly attributable to better realisations and lower costs in both the operating segments and higher volume in the PVC resin segment. Overall, a decline in the cost of raw material as a percentage of sales to 58 per cent in Q2FY21 vs 77 per cent in Q2FY20 helps in the overall healthy operating performance.

PAT for the quarter came in at Rs 122.83 crore as against Rs 102.27 crore in the corresponding quarter last year, with a YoY increase of 20.1 per cent.