Finolex H1 revenue rises 4% despite 4% volume decline

Finolex Industries Limited reported H1 FY27 revenue of Rs 1,978 crore, up 4% from Rs 1,902 crore in H1 FY26, although sales volume fell 4% to 151,106 metric tonnes. Finolex attributed the revenue increase to improved realizations and healthy Q2 FY27 volume growth, while profit before tax rose 6% to Rs 300 crore.

How did Finolex revenue rise while H1 volume fell?

Finolex increased H1 FY27 revenue by 4% despite a 6,359-metric-tonne reduction in sales volume from H1 FY26. Sales volume was 151,106 metric tonnes in H1 FY27, against 157,465 metric tonnes a year earlier, while revenue increased by Rs 76 crore to Rs 1,978 crore. Finolex said improved realizations and healthy Q2 FY27 volume growth supported the revenue gain.

The first-half comparison shows volume and revenue moving in opposite directions. Volume declined 4%, but revenue rose 4%, indicating that the improvement in realizations cited by Finolex offset the lower tonnage at the revenue line. The presentation does not provide a per-tonne realization figure, a product-level revenue breakdown or a quantified split between pricing and product mix.

The H1 FY27 outcome also reflected an uneven six-month pattern. Finolex said the 4% first-half volume decline was mainly due to a decline in Q1 FY27, while Q2 FY27 delivered growth. The reported H1 revenue increase therefore combined lower aggregate volume with improved realizations and a stronger second quarter.

What changed in Finolex Q2 FY27 performance?

Finolex reported Q2 FY27 sales volume of 83,407 metric tonnes, up 28% from 65,336 metric tonnes in Q2 FY26. Q2 revenue rose 27% to Rs 1,094 crore from Rs 859 crore, with Finolex linking the sales increase to the improvement in volume. This quarterly recovery was the volume component that Finolex said helped support H1 FY27 revenue.

The Q2 FY27 performance was also higher than Q1 FY27. Volume rose 23% from 67,699 metric tonnes in Q1 FY27 to 83,407 metric tonnes in Q2 FY27, while revenue increased 24% from Rs 884 crore to Rs 1,094 crore. Even after that sequential increase, H1 FY27 volume of 151,106 metric tonnes remained below the 157,465 metric tonnes reported for H1 FY26.

Profit measures did not match Q2 revenue growth on a year-on-year basis. EBIT was Rs 96 crore in Q2 FY27, down 6% from Rs 103 crore in Q2 FY26, though it was 22% above Rs 79 crore in Q1 FY27. PBT was Rs 153 crore, down 3% from Rs 158 crore a year earlier but up 4% from Rs 148 crore in Q1 FY27; all quarterly figures are presented on a standalone basis.

How did material costs affect Finolex earnings?

Finolex reported Q2 FY27 earnings before interest, tax, depreciation and amortisation, or EBITDA, of Rs 124 crore, compared with Rs 130 crore in Q2 FY26. Finolex said material costs were 13% higher, offsetting the benefits of 28% volume growth. As a result, the Rs 235 crore year-on-year revenue increase in Q2 did not produce higher EBITDA.

The Q2 EBITDA movement table attributes a Rs 235 crore positive effect to revenue and a Rs 245 crore negative effect to materials consumed between Q2 FY26 and Q2 FY27. Employee benefit expenses contributed Rs 5 crore and other expenses reduced EBITDA by Rs 1 crore, taking EBITDA from Rs 130 crore to Rs 124 crore. The presentation identifies the movements but does not disclose a product-level material-cost split.

For H1 FY27, EBITDA was Rs 231 crore, compared with Rs 223 crore in H1 FY26, and Finolex described the outcome as broadly stable. It said EBITDA margin was maintained at about 12% despite lower overall volumes and higher material costs. Over the same period, EBIT increased Rs 5 crore to Rs 175 crore and PBT increased Rs 16 crore to Rs 300 crore.

The contrast between the quarter and the half year is material. Q2 FY27 revenue rose 27% year on year while EBITDA declined Rs 6 crore, whereas H1 FY27 revenue rose 4% and EBITDA increased Rs 8 crore. Finolex attributed the Q2 result to higher material costs, but the presentation does not provide separate H1 FY27 material-cost amounts or explain the difference between the 3% EBIT increase and the 6% PBT increase.

What do PVC prices show about Finolex operating conditions?

Finolex presented average polyvinyl chloride, or PVC, prices of US$771 per metric tonne in Q2 FY27, compared with US$737 per metric tonne in Q2 FY26. The US$34-per-tonne increase appeared alongside Finolex's disclosure that Q2 FY27 material costs rose 13%. The presentation does not state a direct formula connecting the PVC price movement with Finolex's reported material-cost change.

The PVC/ethylene dichloride, or EDC, delta was US$455 per metric tonne in Q2 FY27, down from US$535 per metric tonne in Q2 FY26. That was a US$80-per-tonne reduction in the spread indicator shown in the presentation. Finolex cites ICIS reports for both the PVC price and PVC/EDC delta, without disclosing its PVC production volume, purchase mix or cost per tonne.

Finolex also reported net free cash of about Rs 2,584 crore in Q2 FY27. This liquidity measure is separate from the Rs 124 crore of Q2 FY27 EBITDA and Rs 300 crore of H1 FY27 PBT. The presentation gives the cash amount but does not disclose a capital-expenditure commitment, debt-repayment schedule or deployment plan for that balance.

Conclusion

Finolex's H1 FY27 figures show that improved realizations and the 28% year-on-year rise in Q2 volume outweighed a 4% first-half volume decline at the revenue line. Revenue increased Rs 76 crore to Rs 1,978 crore, EBIT increased Rs 5 crore to Rs 175 crore and PBT increased Rs 16 crore to Rs 300 crore, while higher material costs limited Q2 EBITDA.

The next disclosed matter to watch is whether Q2 FY27 volume of 83,407 metric tonnes is sustained after the Q1 FY27 decline that Finolex identified as the main reason for lower H1 volume. The presentation also leaves unresolved how the Q2 FY27 PVC price of US$771 per metric tonne and PVC/EDC delta of US$455 per metric tonne translate into Finolex's material costs beyond the reported 13% Q2 increase.