Various lengths of plastic PVC and steel piping sit inside a new home under construction. (Photographer: Tim Boyle/Bloomberg)

Falling Volumes In Pipes Business A Concern, Says Finolex Industries

Finolex Industries Ltd. said the lack of recovery in demand of pipes and fittings in the fourth quarter is a “concern”.

“Normally in the third quarter, the market does open up and uptick starts. This year, it has not happened because of the stress in the farm sector— which contributes close to 70 percent of the revenue,” Anil V Whabi, chief financial officer of Finolex Industries, told BloombergQuint, adding that this fall is temporary and the company expects 12-15 percent volume growth in FY20.

The demand has not picked up (in pipes and fittings) even in the fourth quarter. That’s a concern. However, the demand is good in construction and real estate but non-agricultural sector covers only 30 percent of our business.
Anil V Whabi, chief financial officer, Finolex Industries

Finolex Industries also plans to utilise Rs 250-crore cash sitting on its balance sheet to expand pipes and fittings segment to aid volume growth, he said.

Key Highlights: (Q3, YoY)

  • Revenue rose 5 percent at Rs 757 crore.
  • Net profit rose 14 percent at Rs 79 crore.
  • Ebitda rose 10.5 percent at Rs 126 crore.
  • Operating margin 16.6 percent vs 15.8 percent.

Watch the full interview here: