Finolex Industries

The commissioning of a PVC production facility in 1994-95 has resulted in an effective 32 per cent jump in volumes to 41,172 tonnes.

Buoyant PVC prices compared with the previous year have also come in handy.

Turnover at Rs 551.76 crore for the year ended March 31, 1996, was up 20.17 per cent compared with Rs 459.15 crore.

Better capacity utilisation on the back of the newly commissioned capacities resulted in a volume-led growth which was largely responsible for the improvement in revenues.

Higher contributions from the sale of PVC pipes and fittings and repeat export orders further cushioned the bottomline.

But despite the increase in revenues, margins at the operational level were squeezed.

A steep hike in raw material prices and an exchange loss due to the devaluation of the rupee saw operating margins drop from 23.57 per cent to 20.53 per cent.

Higher depreciation charges and interest costs further eroded the profitability of the company.

Profits, therefore, increased a mere 10 per cent to Rs 36.76 crore and the net profit margins remained under pressure.

At the current price of Rs 14.90, the stock discounts the 1995-96 earnings 5.96 times.

The company has targeted a year end turnover of Rs 600 crore for 1996-97.