Finolex Industries Limited

Industrials — Building Products & Equipment · NSE

₹153.15−₹1.60 (−1.03%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by high debt relative to equity, small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:58 pm

Understanding the Business

Company site ↗

The 60-second version of Finolex Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Finolex Industries Limited manufactures and sells polyvinyl chloride (PVC) pipes and fittings, and PVC resins in India. The company operates in two segments, PVC Resin and PVC Pipes and Fittings.

IndustryBuilding Products & Equipment

SectorIndustrials

Employees1,325

Annual revenue₹4,061 Cr

How does it make money?

Turns over ₹4,061 Cr a year. Of every ₹100 of sales, about ₹15 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 1,325 employees supports ₹3.06 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.06 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 12.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.2%

What is the outlook?

11 analysts covering the stock expect revenue to grow about 11.2% and earnings to grow about 16.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.2%

Est. earnings growth+16.1%

Analysts11

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -7% while net margin moved +157% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-7%

Margin effect+157%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.68 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

66/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

77/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

15.4x

3Y Median

26.9x

40 monthly readings · mean 33.3x · range 11.6x–80.6x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 43% below its 3y median of 26.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 83% below the peer median of 88.8x.

vs. its own history

Cheap

26.9x median over 40 months · -43%

vs. sector peers

Cheap

88.8x median of 3 peers · -83%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.1x

PEG

0.46

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 8.0% to 20.1% over 3 years.
Debt is being paid down
Total debt is down 18% over 3 years.
Return on equity is rising
ROE has improved from 5.1% to 9.6%.
Return on capital is rising
ROCE has improved from 6.5% to 12.6%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 1 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 7.17x — earnings must service borrowings before shareholders see anything.
🟡Receivables growing faster than salesFinancial
Receivables up 22% against revenue up -7% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 52% against revenue up -7% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 8.0% to 20.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 18% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 43% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 83% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 7.17x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 22% against revenue up -7%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 18%✓ 20.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹127 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 10%✓ 12.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 26.9x✓ 15.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 6 neutral · 2 weak

Market Cap

₹9,469 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.4x

Fair

Fairly valued against the generic band

P/B Ratio

1.52x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹9.96

Profitable

Profitable on a per-share basis

ROE

9.6%

Moderate

Moderate capital efficiency

ROCE

12.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

7.17x

High

High leverage

Revenue Growth (YoY)

-15.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

16.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.31%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹127 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

14.6x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

9.0%

Average

Average margins

Net Margin

15.6%

Good

Strong bottom-line conversion

Current Ratio

3.54

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.68

Defensive

Steadier than the market

52W Range Position

11%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

152.4 / 156.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

48.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,361 Cr	₹4,274 Cr	₹4,109 Cr	₹4,061 Cr	-2.4%
EBITDA	₹350 Cr	₹675 Cr	₹606 Cr	₹817 Cr	+32.6%
EBITDA Margin	8.0%	15.8%	14.7%	20.1%	—
PAT (Net Profit)	₹251 Cr	₹474 Cr	₹800 Cr	₹599 Cr	+33.7%
EPS	₹4.04	₹7.66	₹12.94	₹9.69	+33.9%
ROE	5.1%	8.4%	13.1%	9.6%	—
ROCE	6.5%	11.4%	16.6%	12.6%	—
Total Debt	₹541 Cr	₹394 Cr	₹237 Cr	₹446 Cr	-6.2%
Free Cash Flow	₹139 Cr	₹267 Cr	₹267 Cr	₹127 Cr	-3.0%

🔴 Revenue has shrunk at 2.4% a year over 3 years.

🟢 EBITDA has grown at 32.6% a year over 3 years.

🟢 EBITDA Margin has risen from 8.0% to 20.1% over 3 years (+12.1 pts).

🟢 PAT (Net Profit) has grown at 33.7% a year over 3 years.

🟢 EPS has grown at 33.9% a year over 3 years.

🟢 ROE has risen from 5.1% to 9.6% over 3 years (+4.5 pts).

🟢 ROCE has risen from 6.5% to 12.6% over 3 years (+6.2 pts).

🟢 Total Debt has shrunk at 6.2% a year over 3 years.

🔴 Free Cash Flow has shrunk at 3.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹7,596 Cr

Total Liabilities

₹1,381 Cr

Cash & Equivalents

₹31 Cr

Operating Cash Flow

₹192 Cr

Capex

-₹65 Cr

Shareholding (proxy)

Institutional Holding

15.3%

Insider Holding

59.3%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

11 Sept 2026

Analyst Consensus

Recommendations

9 Buy · 6 Hold · 0 Sell

Target Price (Mean)

₹199.67

+30.4% vs CMP

Target Range

₹170 – ₹265

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive2 mixed3 general

Finolex Industries (NSEI:FINPIPE) Stock Forecast & Analyst Predictions

Simply Wall Street, 07 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

FINPIPE Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Compare Finolex Industries with

Equitymaster, 15 Oct

Volumes soar at Finolex Industries Ltd counter

Business Standard, 17 Jun

Finolex Industries shares jump 8% after Q4 profit surges 59% YoY; stock rallies 20% in a week

The Economic Times, 27 MayResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Buy Finolex Industries; target of Rs 240: Anand Rathi

Moneycontrol.com, 29 May

Watch Items

Revenue growth is negative (-15.3%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Valuation

MiddlingGrowth · Profitability

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑