Finolex Industries upbeat on sterling Q2 figures

Finolex Industries surged 2.83% to Rs 98.15, after its net profit rose 108.9% for Q2 September 2006. The counter clocked 1.46 lakh shares on the BSE. The stock witnessed a solid rally in the past few trading sessions. >From Rs 80.15 on 31 August 2006, the stock surged 15.16% to Rs 98.55 by 25 September 2006, as buying continued on heavy volume. Thereafter, the stock remained range-bound, between Rs 92 and Rs 97. The stock closed at Rs 95.45 on 13 October 2006.

At the current price of Rs 98.15, Finolex Industries trades at 31.86 times its Q1 June 2006 annualised EPS of Rs 3.08.

Finolex Industries has reported a net profit growth of 108.9% to Rs 19.99 crore for Q2 September 2006, compared to Rs 9.57 crore in Q2 September 2005. Net sales during the same period has risen 11.3%, to Rs 196.12 crore from Rs 176.21 crore.

The company expects global demand for PVC resin to grow at around 3.5% per annum. Demand in India is expected to show double digit growth in the current year.

In the PVC pipes segment, the company expects significant growth in coming years due to government initiatives at central and state levels.

In April, the company had set up a coal-based 22 Mw captive power plant for its PVC unit at Ratnagiri. The plant will become operational by September 2007.

Finolex manufactures PVC resins and PVC pipes.

To meet rising demand, the company has proposed to expand PVC resin capacity from 1.30 lakh tonnes to 2.60 lakh tonnes. It also plans to increase the PVC pipe capacity further.