Finolex Industries’ first‑quarter of FY27 saw PVC and F&F volumes drop 27% year‑on‑year. The decline was driven by volatile PVC prices and channel destocking, and a higher exposure to agricultural customers further squeezed volumes.
Management did not give a full volume forecast for FY27 because uncertainty remains. However, it expressed cautious optimism that PVC prices will level off, and it has kept its EBITDA margin target below 15% for the year.
PVC prices rose by about INR 12–13 per kilogram after the Ministry of Industry’s price intervention and the removal of a customs duty exemption. Most of the price hike was passed on to customers, which helped keep Q2FY27 revenue in line.
The company’s outlook for FY26‑28 shows a revenue CAGR of 6.7% and an adjusted PAT CAGR of 1.6%. Volume is expected to grow at 3.1% and EBITDA margin to reach 14.0% by FY28.
The research team lowered its earnings estimates for FY27 and FY28 by 5.0% and 5.7% respectively. It kept an ‘Accumulate’ recommendation, with a target price of INR 197, down from INR 207, based on 18‑times March 2028 earnings and a 50% discount valuation of Finolex Cables.