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Finolex Industries Ltd. Stock Analysis

Mid Cap
Evaluated by 2541 users | BSE: 500940 | NSE: FINPIPE |
Plastic Products
Finolex Industries Limited (FIL), formerly Finolex Pipes Ltd., was incorporated in 1981 and has been in the Plastics business since then. Beginning as a modest rigid PVC (Poly Vinyl Chloride) pipe manufacturer, FIL went on for backward integration and now manufactures PVC resin too.FIL is the...
1. Right Stock
Very Good
2. Right Price
3. Right Time

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Finolex Industries Ltd. has performed well in majority of the past ten years indicating its past ten year financial track record is very good
Value Creation
Value Creation Index Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 8.17%8.07%13.68%15.93%7.51%16.29%17.25%11.2%13.55%14.19%
Value Creation Index -0.37-0.380.040.23-0.420.240.33-0.140.040.09
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 1,9782,1002,1452,4532,4762,8432,6022,7383,0912,986
Y-o-Y Gr. Rt.-6.2%2.1%14.4%0.9%14.8%-8.5%5.2%12.9%-3.4%
Adjusted EPS (Rs.) 5.815.7515.115.924.8918.5328.123.1429.2526.95
Y-o-Y Gr. Rt.--1%162.6%5.4%-69.3%278.9%51.7%-17.7%26.4%-7.9%
Book Value per Share (Rs.) 50.0153.3658.1263.6463.45126.5184.65222.78203.74155.5
Adjusted Net Profit 72.171.418719860.6230349287363334
Net Op. Cash Flow (Rs. Cr.) -94.215527424521256925233839197.1
Debt to Cash Flow from Ops -7.936.743.062.9130.370.370.30.232.91
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Finolex Industries Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 4.7%3.8%4.7%-3.4%
Adjusted EPS 18.6%40.7%-1.4%-7.9%
Book Value per Share 13.419.6-5.6-23.7
Share Price 25.2% 14.2% -6.8% -11.8%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 11.9311.1427.0926.157.6919.518.0611.3613.7115.01
Operating Profit Margin (%) 11.8211.0816.7516.198.7614.4221.6417.6919.5515.74
Net Profit Margin (%) 3.643.48.738.052.458.0913.410.4911.7411.2
Debt to Equity 1.21.571.160.90.810.130.040.040.040.15
Working Capital Days 164142105951008392112106123
Cash Conversion Cycle 30363545492725434263
Corporate Governance What do we look at?
Corporate Governance
Board Credentials
Promoter's holding
Transparency
Integrity
Entity Percentage Holding
Promoters 52.47%
Institutions 15.28%
Non-Institutions 31.90%
Others 0.35%
Pledged *0.020.020.020.020.020.020.020.020.020.02
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Finolex Inds and arrived at the following conclusion:

Past 10 year's financial track record indicates that Finolex Inds is a good quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Finolex Inds's performance infers:

Finolex Inds earnings have grown by 40.7%, whereas share price has appreciated 14.2% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Finolex Inds share prices over the last 10 years. Here is what we found out:

Finolex Inds share price has appreciated 17.7% annually over the past ten years.

Finolex Industries Limited (FIL), formerly Finolex Pipes Ltd., was incorporated in 1981 and has been in the Plastics business since then. Beginning as a modest rigid PVC (Poly Vinyl Chloride) pipe manufacturer, FIL went on for backward integration and now manufactures PVC resin too.

FIL is the largest PVC pipe manufacturer in India. The Pipes division of FIL is the first PVC pipe manufacturer in India to get ISO 9001: 2000 certifications. Production

Finolex Industries Limited (FIL), formerly Finolex Pipes Ltd., was incorporated in 1981 and has been in the Plastics business since then. Beginning as a modest rigid PVC (Poly Vinyl Chloride) pipe manufacturer, FIL went on for backward integration and now manufactures PVC resin too.

FIL is the largest PVC pipe manufacturer in India. The Pipes division of FIL is the first PVC pipe manufacturer in India to get ISO 9001: 2000 certifications. Production capacity of the Pipes division is over 90,000 metric tonnes per annum spread over its two ultra modern plants at Urse (near Pune) and Ratnagiri. The company offers a wide range of PVC pipes and fittings, for diverse applications in agriculture, housing, telecom, industry, etc., ranging between 20 mm to 400 mm diameter. The company also manufactures specialty pipes and fittings, namely SWR (Soil, Waste and Rain Water) as well as ASTM pipes and fittings for the Construction Industry. The Pipes division of the company has won the PLEXCONCIL ‘Top Exporter Award’ on five occasions.

The company has its PVC resin plant near Ratnagiri (350 Kms. South of Mumbai) on the West Coast of Maharashtra State. It is one of the largest PVC manufacturers in India. The 260000 metric tonnes PVC plant has been set up in technical collaboration with Uhde GmbH of Germany under technology license from Hoechst AG. FIL manufactures suspension grade PVC as well as emulsion/paste grade PVC.

As a part of its PVC complex, the company has set up an open sea cryogenic jetty. The Finolex jetty is the first of its kind in the private sector in India. It is located near the PVC plant and is presently utilized for importing the feedstock for manufacture of PVC as well as for importing LPG.

The strength of FIL lies in its quality products and satisfied customers. Over the years, the company has built a very large distribution net work which adds to its strength. The name Finolex is synonymous with Quality not only in India but also with FIL's international customers.

Products

PVC Resin - PVC is a thermoplastic resin, which in versatility of processing and application surpasses all other thermoplastic materials. This unique polymer is one of the oldest established plastics. Today, PVC finds applications in insulation of cables, in pipes and hoses, agricultural products, windows and profiles, flooring tiles used in the building industry, blister packaging, films and sheets, foamed leather cloth, curtains, tarpaulins, and also for medical use - for IV, blood bags, etc. The universality of its service properties is such that new areas of application are being continuously developed.

PVC-U Pipes & Fittings - FIL is the largest PVC-U pipe manufacturer in India and the first to have been awarded the IS/ISO 9001:2000 certification. FIL offers a wide range of PVC-U pipes and fittings, for diverse applications in agriculture, housing, and telecom etc. ranging between 20 mm to 400 mm diameter. The range of PVC-U pipes and fittings that FIL offers is as follows:

  • Selfit PVC-U Pipes (for agriculture and potable water supply) As per IS 4985-2000
  • Ringfit PVC-U Pipes (for agriculture and potable water supply) As per IS 4985-2000
  • Moulded Fittings for Agriculture (As per IS 7834-1987)
  • Fabricated Fittings for Agriculture
  • Protector Well Casings and Screens (As per IS 1218-1992)
  • Underground Sewerage Pipes (As per IS 15328-2003)
  • Selfit & Ringfit SWR PVC Pipes (As per Is 13592 with Latest Amendment)
  • SWR Moulded Fittings (As per IS 14735-1999 with Latest Amendment)
  • Plumbing Pipes (for domestic plumbing applications) As per IS 4985-2000, As per ASTM D 1785
  • Solvent Cemented Fittings (for domestic plumbing applications) As per ASTM D 2467 in Schedule 80 series

Chemicals - Finolex is actively trading in Ethylene Di Chloride and Methanol catering to various industries in the country. These products are used as solvents in the Pharma, Fertilizer, Paints, Lamination, Amines and various other industries in India. Finolex is directly importing these products at their own jetty at Ratnagiri and has built world class storage facilities for these products. The strong infrastructure at Ratnagiri is backbone of these trading activities.

Group Companies

  • Finolex Cables Ltd
  • Finolex Industries Ltd
  • Finolex J-Power Systems Pvt. Ltd
  • Finolex Plasson Industries Ltd

Awards

Over a period of last many years Finolex Industries Ltd. has received various awards and has set its own benchmark in the area of excellence.

  • National safety Council Award - Maharashtra Chapter, Prashansha Patra from National safety Council, is few of these awards.
  • Finolex also has great awareness in its environmental responsibilities and has taken many efforts towards addressing the environmental issues. For its efforts it has been honored by the GreenTech Environment Excellence Gold Award.
  • It is not only in the area of manufacturing and Environment that Finolex has tried to excel but it has also got various other Government recognition such as Sammanpatra from Govt. of India, Department of Revenue, Central excise, Custom & service tax etc., for outstanding contribution to central excess revenues.

Milestones

  • Finolex Group was established in 1958 and today has turnover in excess of Rs 4,000 crores with 5 companies and 11 modern state-of-art manufacturing facilities located at Pune, Ratnagiri, Goa and Uttarakhand
  • The prominent group companies, Finolex Cables Ltd & Finolex Industries Ltd manufacture and market a diverse range of products comprising of Electrical and Communication Cables, Copper Rods, PVC Sheets, PVC Resin and PVC Pipes & Fittings, Electrical Switches, Compact Fluorescent Lamps (CFL's). Finolex has also established an advanced IT institute, I2IT at Pune and an engineering college at Ratnagiri
  • Finolex has over the years emerged as a very powerful brand synonymous with top quality products. A national distribution network makes its products available across the country
  • Finolex Cables Limited, the flagship company of the Finolex group started its operations with the manufacturing of Automobile Cables in 1958. In1970 Finolex started manufacturing Electric wires, single and multicore Flexible Cables. Further expanding its product range in 1972 Finolex started manufacturing PVC insulated Winding Wires and 3 Core Flat cables for submersible lamps
  • In 1980, Finolex started manufacturing 1.1 KV PVC insulated Power & Control Cables. In 1984, the company started manufacturing Jelly Filled Telephone Cables. Thus it became the first Indian company in Private Organized Sector to supply JFT cables to DoT. It is also 1st Indian company to develop and supply Foam Skin Cable to DoT
  • In 1993, Finolex added one more product in its product portfolio, Co-axial Cables. In 1993 Finolex Cables became the first cable company to receive ISO 9002 quality certification. In 1996, Finolex diversified its product portfolio and started manufacturing PVC Sheets. Keeping track of global trends in 1996 Finolex launched two products viz. Flamegard (Flame Retardant Low Smoke) wires & Fibre Optic Cables in. Thus Finolex Cables is the first company in India to introduce FRLS cables
  • As communication was becoming need of hour, in 1998 Finolex started manufacturing Telephone and Switchboard cables. Further expanding its product portfolio in 2006, it launched Electrical Switches and Compact Fluorescent Lamps (CFL's)
  • In 2008 Finolex started manufacturing HT Cables (upto 33KV) at Urse, Pune. It has also put up a manufacturing unit equipped with latest state of the art modern machinery at Uttarakhand. Finolex is the first company in India to start manufacturing LAN Cables
  • The company has set several benchmarks and has been recognized by industry and peers alike. In 1989 Company won the Harvard Business School - Economic Times award for Corporate Excellence; it was also declared the winner of Voice and Data magazine’s Top Telecom Company Award in 2003; the IIM-LIC Award for Marketing Excellence in 1994-95; Star Performer Award for outstanding contribution to Engineering Exports during the year 2005-06 and several other accolades have come its way
  • Finolex Cables has also featured in the Top 150 Hidden Champions of the World by World Link, Geneva. It ranked among the leading organizations of Business India's Super 500 Corporations. In the survey conducted by Business Today and Stern Standard, Finolex was listed among the Best Wealth Creating Companies of India
  • Finolex Cables is the only Superbrand Cable Company in India. It has received Superbrand Status for the 3rd consecutive year
  • Finolex Industries Limited (FIL) was incorporated in 1981. It had a modest beginning as a rigid PVC (Poly Vinyl Chloride) pipes manufacturer with manufacturing plant in Pune
  • In 1985, FIL pioneered the concept of ‘Ringfit’ pressure pipes
  • From 1984 to 1988, FIL won the PLEXCONCIL ‘Top Exporter Award’ on five consecutive occasions
  • In 1994 FIL set up a state of the art PVC Resin plant near Ratnagiri on the West Coast of Maharashtra State. The 130,000 M.T. PVC plant was set up in technical collaboration with Uhde GmbH of Germany and under technology license from Hoechst AG. FIL manufactures suspension PVC as well as emulsion/ paste PVC
  • In 1996, FIL became India’s first manufacturer of PVC pipes and fittings to be awarded the ISO 9001: 2000 certification
  • In 1999, to meet growing demand, FIL also started manufacturing PVC pipes at Ratnagiri
  • In 1999 to cater the need of Plumbing sector, FIL introduced ASTM Pipes
  • In year 2002 both PVC Pipes and PVC Resin plants at Ratnagiri were awarded the IS14001 certificate for Environment Management Systems
  •  In 2006, Finolex Industries Ltd., proudly celebrated 25 years of its success
  •  In 2006 PVC Resin capacity was expanded from 1,30,000 MT to 2,60,000 MT
  •  Further expanding its product range, in 2006, FIL launched ASTM fittings to its product portfolio
  • In 2007 FIL introduced Underground Sewerage Pipes as per IS: 15328 - 2003
  • In 2008, taking a step further with advancement in technology, FIL introduced LEAD FREE Plumbing pipes as per ASTM Standards
  • In 2008, FIL started a brand new state-of-the-art unit for manufacturing agriculture pipes and casing pipes at Urse, Pune with the capacity of 28000 MT p.a.
  • In 2010, Finolex Industries proposed to set up a rigid PVC pipes manufacturing plant at Masar, Baroda in Gujarat with an annual capacity of 50,000 MT at an estimated cost of Rs 100 crore.
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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