Finolex Industries expects PVC prices to soften with China dumping surplus PVC (Polyvinyl Chloride) in the Indian market. Finolex Industries is India’s largest and only backward integrated PVC pipes and fittings manufacturer.
Sanjay S Math, MD, Finolex Industries, said at an investor call that PVC prices had after touching an all-time high of $1,900 per metric tonne came down to $ 1,500/MT at present. The average PVC price during Q4FY22 was $1,563 compared to $1,900-2,000 during October-November 2021.
Anil V Whabi, director, finance and CFO, Finolex, said PVC prices came down in the November 2021-January 2022 period and contracted margins during Q4FY22. Given the slowdown in China, surplus material is being pushed into India and a lot of orders were being booked, which was affecting the PVC prices in the country, Whabi said. In addition, Anti Dumping Duties (ADD) on PVC imported from China were removed in February 2022. So a further drop in PVC prices is expected in the domestic market. Imported prices of PVC are expected to go to $1,410 in the second quarter of this fiscal.
Margins with Finolex Industries reporting a 35.5% year-on-year decline in operating profit to Rs 264.66 crore during the March 2022 quarter.
The company reported a 66.1% year-on-year growth in profit after tax for the quarter. This was on account of an exceptional gain of `376 crore on the assignment of leasehold rights on land during the quarter.
Total income from operations was up by 27.7% to Rs 1,594.57 crore for the quarter. Volume in the pipes and fittings segment was up 30.5% to 78,629 MT in Q4FY22.
Prakash P Chhabria, executive chairman, Finolex Industries, said the year has been a stellar one despite the challenging conditions. The company has forecasted a double-digit growth in volumes during FY23.
Whabi, who is all set to take over as managing director of the company after Math retires at the end of this month, said the company would be investing around Rs 200-250 crore in capital expenditure over the year and a half. The company has transferred half of the 70-acre land it had at Chinchwad in Pune for Rs 376 crore and this transaction was completed by March 31, 2022. Finolex would be transferring the leasehold rights of the remaining half of the land in FY23.