Finolex Industries expects PVC prices to soften in the Indian market with Chinese dumping surplus PVC (polyvinyl chloride). Finolex Industries is the largest and only backward integrated PVC pipe and fittings manufacturer in India.
Sanjay S Math, MD, Finolex Industries, said in an investor call that PVC prices have now dropped to $ 1,500 / MT after touching an all-time high of $ 1,900 per metric tonne. The average PVC price in Q4FY22 was $ 1,563, compared to 1, 1,900-2,000 in October-November 2021.
Anil V Wabi, Director, Finance and CFO, Finolex, said PVC prices declined during the November 2021-January 2022 period and margins narrowed to Q4FY22. Due to the recession in China, surplus material is being pushed into India and large orders are being booked, which is affecting the price of PVC in the country, Wabi said. Also, the anti-dumping duty (ADD) on PVC imported from China was removed in February 2022. Therefore, the price of PVC in the domestic market is expected to decrease further. The import price of PVC is expected to touch $ 1,410 in the second quarter of this fiscal year.
The margin with Finolex Industries has reduced its operating profit by 35.5% year-on-year to Rs 264.66 crore in the March 2022 quarter.
The company reported a 66.1% year-on-year increase in post-tax profit for the quarter. This is due to an exceptional gain of `376 crore on land lease allocation this quarter.
Total revenue from operations for the quarter increased by 27.7% to Rs 1,594.57 crore. Pipes and fittings segment volume increased by 30.5% to 78,629 MT in Q4FY22.
Prakash P Chabria, executive chairman of Finolex Industries, said the year was a great one despite the challenging situation. The company forecasts a double-digit increase in volume on FY23.
Wabi, who is set to take over as the company’s managing director after Math retires later this month, said the company would invest about Rs 200-250 crore in a year and a half. The company has handed over half of the 70-acre land at Chinchwad in Pune for Rs 376 crore and the transaction was completed by March 31, 2022. Finolex will transfer the lease rights to the remaining half of the land in FY23.