India Equity Analyst - Fundamental & Thematic, Beat the Street

Sudarshan Bhandari

India Equity Analyst - Fundamental & Thematic

Beat the Street

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Read Business Not Stock Prices

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/finolex-industries-ltd" target="_blank" data-smartkarma-citation="entities:1469:1" rel="noopener">Finolex Industries (FNXP IN)</a> is a leading, vertically integrated Indian PVC manufacturer, the 2nd largest in PVC resin and 3rd in pipes &amp; fittings, with captive production offering cost advantage.</li>
<li>Margin recovery in FY26 is targeted post headwinds faced by industry via pricing correction, improved product mix, enhanced discount management, and cost efficiency programs. </li>
<li>Potential ADD/BIS mandates mid-FY26 may curb Chinese imports, possibly enabling a 5–10% domestic price increase, reshaping the market.</li>
</ul>



Finolex Industries (FNXP IN) is a leading, vertically integrated Indian PVC manufacturer, the 2nd largest in PVC resin and 3rd in pipes &amp; fittings, with captive production offering cost advantage.
Margin recovery in FY26 is targeted post headwinds faced by industry via pricing correction, improved product mix, enhanced discount management, and cost efficiency programs. 
Potential ADD/BIS mandates mid-FY26 may curb Chinese imports, possibly enabling a 5–10% domestic price increase, reshaping the market.


The Beat Ideas: Finolex Industries Ltd ~ Vertically Integrated PVC Manufacturer

External broker reports(aggregated public sources), Prabhudas Lilladhar

Prabhudas Lilladhar

External broker reports(aggregated public sources)

Prabhudas Lilladher is one of India's leading research based financial services organisation.

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>P&amp;F reported modest volume increase of 5.5% YoY due to weak season for agri business and delays in ADD on PVC resin prices.</li><li>The company has guided single digit volume growth for FY25, which leads to high single digit volume growth in Q4FY25. The management indicated double digit volume growth for FY26, with improvement in margins as competitive prices will improve with demand and normalization in channel inventory.</li><li>EBIT/kg for the P&amp;F segment moderated at Rs3.7 with lower PVC-EDC spread at USD 517/MT and 5.1% YoY lower realization.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

P&amp;F reported modest volume increase of 5.5% YoY due to weak season for agri business and delays in ADD on PVC resin prices.The company has guided single digit volume growth for FY25, which leads to high single digit volume growth in Q4FY25. The management indicated double digit volume growth for FY26, with improvement in margins as competitive prices will improve with demand and normalization in channel inventory.EBIT/kg for the P&amp;F segment moderated at Rs3.7 with lower PVC-EDC spread at USD 517/MT and 5.1% YoY lower realization.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Finolex Industries (FNXP IN) - Margin Contracted, Modest Volume Growth

Market & Forensics Analyst, Beat the Street

Nimish Maheshwari

Market & Forensics Analyst

<ul>
<li>India's PVC market faces high import dependency, reaching 63% in FY25, due to stagnant domestic capacity and a widening 3 MMT demand-supply gap. </li>
<li>Adani and Reliance plan 2.5 MTPA domestic capacity expansion, bolstering production to reduce import reliance. </li>
<li>This aims to cut import dependency from 63% to under 30% by FY27, narrowing the gap to 1.4 MMT, enhancing domestic profitability.</li>
</ul>


India's PVC market faces high import dependency, reaching 63% in FY25, due to stagnant domestic capacity and a widening 3 MMT demand-supply gap. 
Adani and Reliance plan 2.5 MTPA domestic capacity expansion, bolstering production to reduce import reliance. 
This aims to cut import dependency from 63% to under 30% by FY27, narrowing the gap to 1.4 MMT, enhancing domestic profitability.


The Adani Factor: Creating India's Biggest PVC Capacity

Thematic (Sector/Industry)

<ul>
<li>PVC‐pipe makers endured FY 25’s perfect storm, resin prices crashed, trade channels destocked, volumes wobbled, yet April-May demand snapped back and resin prices appear to have bottomed.</li>
<li>Anti-Dumping duties plus the coming BIS quality curb on Chinese resin should lock in price discipline; government infra-spend, real-estate and irrigation needs set up 10-12 % volume CAGR for FY27.</li>
<li>With inventory now thin, even a modest restocking cycle could turbo-charge revenues while stabilising input costs let organised players claw back EBITDA margins; diversified leaders look best placed.</li>
</ul>


PVC‐pipe makers endured FY 25’s perfect storm, resin prices crashed, trade channels destocked, volumes wobbled, yet April-May demand snapped back and resin prices appear to have bottomed.
Anti-Dumping duties plus the coming BIS quality curb on Chinese resin should lock in price discipline; government infra-spend, real-estate and irrigation needs set up 10-12 % volume CAGR for FY27.
With inventory now thin, even a modest restocking cycle could turbo-charge revenues while stabilising input costs let organised players claw back EBITDA margins; diversified leaders look best placed.


Thematic Report: Indian Pipe Sector Turnaround

Prince Pipes and Fittings / Equity Bottom-Up

<ul>
<li>Prince Pipes entered the premium bathware segment with the Aquel acquisition, expanding into lifestyle plumbing beyond traditional piping systems.</li>
<li>This move broadens its addressable market and margin profile, creating cross-selling opportunities across its large dealer network. 
</li>
<li>With margin recovery likely and industry destocking easing, Prince Pipes appears well-positioned for rerating and multi-year profit growth.</li>
</ul>


Prince Pipes entered the premium bathware segment with the Aquel acquisition, expanding into lifestyle plumbing beyond traditional piping systems.
This move broadens its addressable market and margin profile, creating cross-selling opportunities across its large dealer network. 

With margin recovery likely and industry destocking easing, Prince Pipes appears well-positioned for rerating and multi-year profit growth.


The Beat Ideas: Prince Pipes- Margin Recovery and Market Expansion in Full Flow

India

Finolex Industries Limited manufactures PVC pipes and fittings, which are sold primarily to businesses in the agricultural sector.  The Company also manufactures PVC resins, which are used as raw materials for PVC pipes and fittings.

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Finolex Industries (FNXP IN)

The Beat Ideas: Finolex Industries Ltd ~ Vertically Integrated PVC Manufacturer

Finolex Industries is a top Indian PVC manufacturer, aiming for margin recovery in FY26 through various strategies, with potential for domestic...

Sudarshan Bhandari