Capitaline

Analyst Meet / AGM 02-Jun-17

Conference Call

Finolex Industries

Expect capex of Rs 240 crore over FY18-20

Finolex Industries conducted conference call to discuss results for the quarter ended March 2017 and way forward. Senior Management of the company addressed the call.
Highlights of the Concall

Total income from operations was at Rs 1016.4 crore for Q4FY17 against Rs 926.0 crore in Q4FY16. EBITDA was Rs 178.5 crore against Rs 115.6 crore for Q4FY16. Profit after tax was at Rs 123.3 crore against Rs 82 crore. Sales volume for PVC Pipes & Fittings was at 63,982 tonne in Q4FY17 against 67.693 tonne in Q4FY16

For FY17 total income from operations was at Rs 2987.6 crore for FY17 against Rs 2843.1 crore in FY16. EBITDA stood at Rs 563 crore against Rs 404.4 crore in FY16. Profit after tax was at Rs 352.2 crore for FY17 against Rs 254.4 crore in FY16. Sales volume for PVC Pipes & Fittings was at 209,339 tonne in FY17 against 208,764 tonne in FY16.

The company benefited from lower crude prices which positively affected the raw material costs and aided better margins

The company expects that ongoing Government initiatives as well as demands from the agri and non-agri segments should push up growth in the PVC pipe segment.

The company expects that non-agri space to become 50% of its earnings in the next four-five years from currently 30%.

Company does not participate in any government orders.

No price hike was taken in PVC resin during the quarter.

PVC-EDC spread for 4QFY17 was US $ 662 per tonne, and currently it is at US $ 635 per tonne.

Gross debt at the end of 4QFY17 was Rs. 90 crore.

Around 100 dealers added in FY17 taking the dealer count to 700-800 at the end of FY17 broadly spilt in 50:50 ratio in urban and rural areas.

Finolex's cumulative pipes and fittings capacity stands at 290000 tonne. The company plans to add 150000 tonne capacity and the full benefit of the same is expected to accrue by 2020. Of this, almost 50000 tonne could be for CPVC. The estimated outlay for this expansion could be almost Rs 240 crore over FY18-20.

GST rate applicable on pipes is 18% which is same what company pays currently. The positive effect of GST will be the shrinking of unorganized sector.

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