Shares of this small-cap stock associated with industrial plastic products dipped around 7 percent in Monday’s trading session after publishing underperforming financial results for the quarter ended September 2023.
With a market capitalization of Rs 12,977.27 crores, the stocks of Finolex Industries Limited started their trading session on Monday at Rs 221.75 and currently trade at Rs 209.15, dipping around 7 percent as compared to the previous close of Rs 225.30 apiece.
Such bearish sentiments around the company’s stock were witnessed after they released financial results for the quarter ended September 2023.
The company, on a sequential basis, reported a fall in the operating revenues as well as net profits with the former moving down from Rs 1,179 crores during Q1FY23-24 to Rs 883 crores during Q2FY23-24 representing a fall of around 25 percent, and, the latter, during the same period, falling from Rs 115 crores to Rs 98 crores.
Moreover, the company, on a yearly basis, has shown opposing movements in the metrics mentioned above with the operating revenues, on one hand, reducing from Rs 941 crores during Q2FY22-23 to Rs 883 crores during Q2FY23-24, and, the net profits, on the other hand, transitioning from a loss of Rs 95 crores to a profit of Rs 98 crores keeping the timeframe the same.
Due to increased cost pressure, the company’s profitability ratios took a hit with the return on equity (RoE) shifting down from 29.75 percent during FY21-22 to 5.68 percent during FY22-23, and, the return on capital employed (RoCE) moving down from 37.02 percent to 7.23 percent.
Coming onto the latest shareholding data available for the September 2023 quarter, the company’s Promoters hold a 52.47 percent stake followed by the Public (retail) investors holding a 47.18 percent stake in the company.
Finolex Industries Limited is engaged in the business of manufacturing rigid chloride pipes, resins, and other fittings. With a wide range of manufacturing plants across India, the company is a market participant in housing, agriculture, construction, and many other industries.
Written by Amit Madnani
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