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CMP- 489

Finolex Industries a 38 years old almost Debt free company is India’s leading manufacturer of PVC Resins and PVC Pipes ; Fittings for the agriculture and non-agricultural sectors. 

Finolex Industries began its operation in 1981as PVC (Poly Vinyl Chloride) pipes manufacturer with manufacturing plant in Pune. Around 1994 , the company  set up a state of the art PVC Resin plant near Ratnagiri on the West Coast of Maharashtra State. The 130,000 M.T. PVC plant was set up in technical collaboration with Uhde GmbH of Germany and under technology license from Hoechst AG. Current Company’s manufacturing plants are located at Pune and Ratnagiri in Maharashtra and Masar in Gujarat.

By 1996 ,FIL became India’s first manufacturer of PVC pipes and fittings to be awarded the ISO 9001: 2000 certification.

45% of sales of FIL comes from PVC business and rest 55% from Pipes and Fittings.

The company has strong distribution network and widespread presence throughout the country, with a wide network of over 18,000 retail outlets ably supported by dealers and sub-dealers.

The demand for new homes (and proper toilets everywhere) is growing strongly, partly driven by government policy. FI not only makes the pipes and fittings that are going into this modernization and acceleration of India’s agricultural and construction sectors, it also produces the polyvinyl chloride (PVC) resin that those pipes and fittings are made from. Unlike its peers, FI is India’s only PVC company with such backward integration and that means it is doubly well-placed to benefit from the country’s transformation.

Finolex Industries holds 2.21Crore Shares of Finolex Cables valued at Rs1000 crores. Apart from that company has negligible amount of Debt , while Cash and Equivalents Stand at around Rs25 Crore as of March 2018.

Over the past 3 years compounded sales growth of the company has remained subdued however the compounded profit growth over the same period was around 75%. Fundamentally the company looks strong and if rural demand picks up accompanied with good monsoon this could be a very good company to explore.