Finolex Industries reported a 27% jump in Q2 revenue to Rs 1,094 crore, fueled by a 28% increase in sales volume. Despite the top-line growth, PBT remained nearly flat at Rs 153 crore due to raw material price lags. Management has guided for 14-15% EBITDA margins for the fiscal year as they focus on operational debottlenecking.
Finolex Industries Reports Strong Q2 Volume Growth
Q2 Revenue: Rs 1,094 crore (+27% YoY)
Q2 PBT: Rs 153 crore (vs Rs 158 crore YoY)
Reader Takeaway: Strong volume recovery signals demand, but inventory cost lags currently weigh on quarterly profitability metrics.
What just happened
Finolex Industries posted a robust 27% increase in revenue for the second quarter, hitting Rs 1,094 crore. This performance was underpinned by a 28% surge in sales volume to 83,407 MT. However, profitability did not mirror this growth, with PBT dipping slightly to Rs 153 crore from Rs 158 crore in the prior-year period.
Why this matters
The discrepancy between volume growth and flat profit is attributed to a time lag between the procurement of raw materials and their consumption. This mismatch creates periodic margin pressure, a trend management expects to stabilize. The company maintains a target EBITDA margin of Rs 14-15 per kg for the full year.
Business and Operational Update
The company is currently operating at 68% capacity across its 520,000 MT total capacity. Product mix remains balanced with 60% of sales coming from the agriculture segment and 40% from non-agriculture segments. CPVC products now account for roughly 8% of the total volume.
Capex and Cash Utilization
Finolex Industries maintains a significant cash reserve of Rs 2,584 crore as of September 30, 2026. While shareholders are keen on potential capital deployment, management stated that any payout remains a Board decision with no immediate timeline. Planned FY27 capex is pegged at Rs 150 crore, primarily directed toward debottlenecking and replacing older equipment to boost efficiency.
Risks to watch
Management is closely monitoring geopolitical developments in the Middle East, which continue to threaten supply chain stability and logistics costs. Additionally, the company faces structural challenges during the monsoon season when the VCM line is non-operational, impacting short-term utilization rates.
What to track next
Investors should monitor the company’s ability to maintain its per-kg EBITDA targets into the second half of the year, which is historically stronger due to seasonal demand from January to May.