1. At a Glance – Pipes, Profits, and a Portfolio of Fixed Deposits
Finolex Industries Limited (FIL) currently sits at a market cap of ₹11,066 Cr with a stock price hovering around ₹178, nursing a –6.2% return over 3 months and –13.2% over 1 year. The market clearly isn’t impressed yet.
Despite being the 2nd-largest PVC pipes manufacturer and 3rd-largest PVC resin player in India, FIL trades at a P/E of ~23x, which is neither cheap nor outrageously premium—just awkwardly placed.
Q3 FY26 delivered ₹898 Cr revenue (–10.4% YoY) but PAT jumped 55% QoQ to ₹110 Cr, largely thanks to margin recovery and disciplined costs. ROCE at 8.77% and ROE at 6.76% scream “capital efficiency on vacation.”
But here’s the plot twist: the balance sheet is practically debt-free, dividend yield is a respectable 1.12%, and the company is sitting on ₹4,239 Cr of investments like a miser guarding Diwali bonuses. Curious why the market is still grumpy? Read on.
2. Introduction – A Market Leader Acting Like a Defensive Midfielder
Finolex is that student who always tops manufacturing scale but barely passes the capital efficiency exam. As India’s only large backward-integrated PVC pipes company, FIL should theoretically print money during cycles. Instead, it prints stability.
FY22–FY25 was brutal: PVC resin prices collapsed, agri demand was moody, and realizations took a hit. Volumes grew, prices fell, margins sulked. Result? Revenue stagnation and sleepy returns.
Yet, Finolex survived without leverage
tantrums, without promoter drama, and without equity dilution. It quietly paid dividends and built a war chest.
So the big question: Is Finolex boring… or just patiently dangerous?
3. Business Model – WTF Do They Even Do?
Finolex has two businesses, but let’s be honest—only one matters now.
PVC Pipes & Fittings (99% of H1 FY25 revenue):
- 2,000+ SKUs
- Agriculture, plumbing, sanitation, infrastructure
- Volumes grew 42% between FY22–FY24
- Revenue grew only 9% because realizations dropped 23%
Translation: They sold more pipes, but cheaper pipes.
PVC Resin (1% of H1 FY25 revenue):
Once 17% of revenue in FY22, now reduced to an internal supply department.
- FY24 volumes down 75%
- Prices down 32%
- 90% used internally
Finolex has effectively chosen to be a pipes company with captive resin insurance, not a resin trader. Smart defensively. Boring optically.
4. Financials Overview – Numbers That Need Therapy
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr (Q3 FY25) | Prev Qtr (Q2 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 898 | 1,001 | 859 | –10.3% | +4.5% |
| EBITDA (₹ Cr) | 123 | 83 | 130 | +48% | –5.4% |
| PAT (₹ Cr) | 110 | 71 | 119 | +55% | –7.6% |
| EPS (₹) | 1.77 | 1.14 | 1.92 | +55% | –7.8% |
