Shares of Finolex Industries surged 9 per cent to Rs 579 on the BSE in the early morning deals on Tuesday after the company reported a 17 per cent year-on-year (YoY) growth in net profit at Rs 120 crore, on the back of healthy operational performance in September quarter (Q2FY21). The plastic products manufacturer had a profit of Rs 103 crore in the year-ago quarter. On a sequential basis, net profit more-than-doubled from Rs 57 crore in the June quarter (Q1FY21).
Ebitda (earnings before interest, taxes, depreciation, and amortisation) rose 76.5 per cent YoY to Rs 145 crore, while margin improved to 24.7 per cent from 14.2 per in the corresponding quarter of the previous year.
"Subsequent to a Covid-19 induced volume reduction in Q1, the business has witnessed a recovery in Q2 with near-normal operating conditions. The significant improvement in EBIT (earnings before interest tax) on a YoY basis is attributable to better realisations and lower costs in both the operating segments and higher volume in the PVC resin segment," the company said.
In Q2FY21, EBIT margins improved to 21.4 per cent from 10.9 per cent in Q2FY20. PVC resin EBIT margin stood at 26.9 per cent as compared to 14.9 per cent. The revenue; however, registered a single-digit YoY growth of 1.6 per cent to Rs 586 crore during the quarter.
At 09:36 am, the stock was trading 4.5 per cent higher at Rs 556 on the BSE, as compared to a 0.32 per cent gain in the S&P BSE Sensex. A combined 164,000 equity shares changed hands on the counter on the NSE and BSE.