Stock slips up to 5% on after company reports 76% drop in Profit After Tax; Check the details

Stocks of Finolex Industries Limited are in the red today and currently trade at Rs 181.35, slipping 5 percent as compared to the previous closing price of Rs 190.90. 

The company, through a regulatory filing with the BSE, announced its financial results for Q4 as well as for FY2022-23. Facts and figures of the same are been mentioned in the report later on. The company’s Board also recommended a Final dividend of Rs 1.50 per share (75 percent of its Face Value of Rs 2 per share) for the same financial year. 

Finolex Industries Limited is engaged in the business of manufacturing rigid polyvinyl chloride pipes and resins, and fittings. It has been observed that market participants in housing, agriculture, construction, etc have proven to be the largest portion of the customer base for the company. 

Digging into the latest consolidated financials released, the company, on a QoQ basis, has reported an increase in the operating revenues as well as the Profit After Tax (PAT) figures with the former increasing from Rs 1,125 crores in Q3 to Rs 1,141 crores in Q4 and the latter taking a shift from Rs 80 crores to Rs 167 crores representing an increase of around 109 percent. 

Having a comparison of the above-mentioned metrics on a YoY basis, the operating revenues reduced from Rs 4,647 crores during FY21-22 to Rs 4,397 crores in FY22-23. Moreover, the PAT numbers have witnessed a huge downfall of 76 percent slipping from Rs 1,051 crores to Rs 251 crores. 

Apart from the deep fall in the PAT figures mentioned above, the company has performed well in the last couple of years with increasing revenues ranging from Rs 2,985 crores in FY19-20 to the current levels. 

The profitability metrics have been on the rise for the past couple of financial years with the return on equity (ROE) showing a recent movement from 28.16 percent during FY20-21 to 29.8 percent in FY21-22. In congruence with the pattern showed above, the return on capital employed (ROCE) increased from 35.04 percent to 37.06 percent. 

The debt-to-equity ratio, though within the desired limits, has marginally increased from 0.06 times in FY20-21 to 0.07 times in FY21-22. 

Written by Amit Madnani