IIFL Securities Stock Idea: Buy Finolex Industries with Target Rs 325

IIFL Securities recommends buying Finolex Industries at the current market price of Rs 313.65. The company is expected to benefit from rising demand for its products due to increasing construction activity and government infrastructure projects. The target price for Finolex Industries has been set at Rs 325, implying an upside potential of around 4%. The stock has a strong track record of dividend payments and is considered to be a defensive play in the current market environment.

About Finolex Industries:

Finolex Industries Limited is a leading manufacturer of electrical and telecommunication cables in India. Founded in 1958, the company has a strong presence in the domestic market with a wide range of products including power cables, control cables, instrumentation cables, and optical fiber cables. Finolex also exports its products to over 70 countries worldwide. The company has a state-of-the-art manufacturing facility in Aurangabad, Maharashtra, and employs over 2,500 people.

52 Week Price Trend:

Finolex Industries, primarily known for its top-notch PVC products, is currently trading at Rs. 313.65. Over the past year, the stock has seen a significant surge of 97.18%, with its 52-week high price reaching Rs. 359.95. Despite facing a challenging period during the pandemic, the company has bounced back strongly, resulting in its stock price outperforming the benchmark indices. The steady demand for PVC pipes and fittings in the construction and infrastructure sectors has played a key role in this impressive performance. As a result, Finolex Industries remains a compelling investment option for investors seeking exposure to the growing construction industry.

Stratzy's MOST Analysis:

FINPIPE's BBB rating from Stratzy's MOST framework indicates a moderate level of fundamental risk. The rating takes into account the company's management capabilities, outlook, safety, and trend. The "B" in the rating suggests that FINPIPE has a medium level of risk in these areas. Despite this, the overall "BBB" rating indicates that the company's fundamentals are generally sound.

Company's Fundamentals:

Finolex Industries' stock PE ratio of 29.59 indicates that investors are willing to pay 29.59 times the company's annual earnings per share. The PB ratio of 2.42 suggests that the market value of the company's assets is 2.42 times its book value. The dividend yield of 0.7% implies that investors receive an annual dividend of Rs. 0.7 for every Rs. 100 invested in the stock. These metrics provide insights into the company's valuation, profitability, and income distribution to shareholders.

Fundamental and Technical information provided in this blog were last updated on 24 May, 2024

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