Jefferies has reiterated a buy rating on Finolex Industries (FNXP) and raised its target price to ₹275, indicating a potential upside of over 22% from the current market price of ₹223.90.
The brokerage noted that Finolex’s Q4FY25 PAT beat estimates, supported by a sharp improvement in profitability. The company’s operating profit margin (OPM) rose to 14.6%, a 630-basis point jump QoQ, aided by higher-margin product mix and stable input costs.
Finolex’s product mix currently includes 65–70% agri-pipes, making it a solid play on agriculture demand and rural income growth. Additionally, with plumbing products now forming 35% of the mix, the company stands to benefit from the government’s ongoing push on housing and infrastructure. Management is targeting to raise the plumbing mix to 50% over the medium term, which Jefferies sees as margin-accretive.
Valuation-wise, Finolex trades at 23x FY26E PE, which the brokerage notes is at a steep discount to peers, enhancing the risk-reward appeal given the margin expansion opportunity and policy tailwinds.
Disclaimer: This article is for informational purposes only and is based solely on brokerage reports and publicly available data. It does not constitute investment advice or a recommendation to buy or sell any securities. Readers are advised to consult a certified financial advisor before making any investment decisions.
