Finolex Industries (FNXP IN) – Q4FY26 Result Update – Subdued volume, inventory gain drives margin expansion – Downgrade to ‘ACCUMULATE’
Published on 28 May 2026
P&F volume remained flat YoY in Q4FY26 due to weak agri demand, as farmers delayed purchases amid PVC price volatility and expectations of further price corrections, FNXP guided for higher single-digit to low double-digit volume growth in the P&F segment for FY27, while targeting EBITDA margins at sub-15% levels amid continued volatility in RM prices . The company reported an inventory gain of INR 350-400mn in Q4FY26. The company increased its inventory position to 91 days (up 22 days YoY, calculated on sales) at the end of Mar’26 due to volatility in raw material prices and in anticipation of strong agri-pipe demand in Q1FY27. We estimate revenue/EBITDA/adj PAT CAGR of 11.9%/1.9%/4.7% for FY26-28E with P&F volume CAGR of 8.3% and EBITDA margin of 13.7% by FY28E. We have tweaked our earnings estimates for FY27/FY28E and downgrade to ‘Accumulate’ rating with revised TP of Rs207 (earlier Rs 203) based on 18x Mar’28 earnings plus valued stake in the group listed entity Finolex Cables at 50% discount to consensus target market value.
