Religare Research has downgraded Finolex Industries to 'Hold' from 'Buy' with price target of Rs 305.
 
Finolex reported a muted Q4 with revenue declining ~6.8% YoY on lower realisations for PVC resin and pipes. EBIDTA margins too disappointed at ~8.8%, down ~351bps, on account of higher RM and other costs. A poor operating performance and a higher tax rate pulled adj. PAT down by ~50.7% YoY to Rs 276.8mn.

Commenting on the investment rationale, the stock broker said, ''Going ahead, we expect revenue and profits to improve but remain muted due to lower EDC-PVC spreads. We downgrade the stock to HOLD (from BUY) with a Mar'16 TP of Rs 305. Upside risks would stem from a faster-than-expected improvement in PVC-EDC spreads.''

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