The Hindu Business Line : Finolex Ind: on accumulation mode

Accumulation is currently on in Finolex Industries' counter by some domestic and foreign institutional investors, according to market sources. Market talk suggests that trigger for the recent interest is manifold — operational growth at its PVC pipe manufacturing business on the back of increased order flow from the State Government sector, its two proposed SEZs in Maharashtra and the increase in business from its jetty at Ratnagiri.

The stock's traded quantity on the BSE on Thursday shot up to 11.30 lakh shares from the fortnightly average of 3.81 lakh. On the NSE, it saw 4.79 lakh shares change hands. It closed with a gain of over 3 per cent at Rs 92 after touching a day's high at Rs 93.40. Thursday's closing price represents 2.68 per cent gain over the past week.

According to analysts, the company currently is on a better utilisation level of installed capacity, which has almost doubled in the past 20 months. It has proposed to set up a coal-based captive power plant of 50 MW at Ratnagiri.The company owns a jetty at Ratnagiri for off-loading of raw material for manufacture of PVC resin at its plant at Chinchwad, near Pune. According to market sources, the throughput at the jetty has significantly increased in this fiscal despite brief stoppage of operation after a ship sank near it in September.

Rating for bonds

Following improvement in its fundamentals, last month Crisil assigned `AA' rating for the company's long-term non-convertible debentures of Rs 50 crore and Rs 75 crore. The rating agency also revised the outlook to `stable' from `negative' indicating safety of the instrument and earnings from it. Crisil also reaffirmed P1+ rating to the company's Rs 110-crore short-term debts and assigned `AA/Stable' rating to the Rs 150-crore long-term debts.

Jayanta Mallick

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