FINPIPE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.5

📊 Core Financials Overview

Profitability

ROCE: 8.77% and ROE: 6.76% — modest returns, below ideal for a manufacturing firm.

EPS: ₹5.96 — decent, but not strong enough to justify the current valuation.

PAT Qtr: ₹96.9 Cr vs ₹150 Cr — steep 45.8% drop, indicating margin pressure or demand slowdown.

Balance Sheet & Cash Flow

Debt-to-Equity: 0.04 — nearly debt-free, a major strength.

Book Value: ₹96.4 — P/B ~2.25, reasonable for the sector.

Dividend Yield: 0.93% — modest, consistent payout.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 36.4 Above industry average (23.6) — expensive

PEG Ratio -1.82 Negative PEG suggests unreliable or declining growth

Intrinsic Value ~₹190–₹200 CMP slightly above fair value zone

Valuation is stretched given recent earnings decline and weak return metrics.

🏭 Business Model & Competitive Edge

Sector: PVC pipes & fittings — essential for agriculture, construction, and infrastructure.

Strengths

One of India’s largest and only backward-integrated PVC pipe manufacturers

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Strong brand presence in Tier-2 and rural markets.

Diversified product mix across agriculture and industrial segments.

Challenges

Weak revenue growth over the past 5 years (only ~6.77%)

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Heavy reliance on volatile commodity inputs like PVC resin

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Institutional sentiment softening — FII and DII holdings both declined.

📉 Technicals & Entry Zone

Current Price: ₹217

DMA 50: ₹209 | DMA 200: ₹215 — hovering near support

RSI: 57.0 — neutral zone

MACD: Slightly positive — momentum stabilizing

📌 Suggested Entry Zone: ₹190–₹205

A dip near ₹200 would offer a better margin of safety, especially if earnings stabilize.

🧭 Long-Term Holding Guidance

Hold with caution: If already invested, monitor earnings and margin trends closely.

Avoid fresh entry at CMP: Wait for valuation to cool or signs of margin recovery.

You can explore Finolex Industries’ full financials and peer comparison on Screener or check technical charts and investor sentiment on TradingView. Let me know if you'd like a forecast model based on PVC demand or a comparison with Supreme Industries.

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www.screener.in

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simplywall.st

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