Finolex Industries: SEBI RA Kush Ghodasara Sees Nearly 50% Upside Potential

Finolex Industries' shares surged over 7% on Monday, driven by a decisive technical breakout, even as the company's March quarter (Q4) earnings reflected a subdued performance. 

SEBI-registered analyst Kush Ghodasara notes the stock had been consolidating within a narrow range of ₹170 to ₹186 for nearly four months before experiencing a decisive breakout accompanied by heavy trading volumes over the last three days. 

This breakout was further reinforced by the stock forming and surpassing a rounding pattern at ₹216, which has given additional confidence to bullish investors. 

The momentum indicator, RSI, has now entered overbought territory, suggesting that the stock may enter a phase of sideways movement. 

Such consolidation could present an opportunity for long-term investors to accumulate shares, according to him.

Ghodasara adds that on the downside, the 10 to 15-day moving average zone between ₹189 and ₹195 is expected to act as a support and serves as a stop loss.

Conversely, he sees resistance at ₹239, which aligns with the 200-day moving average.

Ghodasara recommends a strategy of buying on dips from the current market price, with upside targets set at ₹239, ₹278, and ₹309, while maintaining a stop loss at ₹189 to manage risk.

On the earnings front, Finolex Industries reported a 5% year-on-year decline in revenue to ₹1,171.8 crore for Q4 FY25, primarily due to weaker realizations. The company's net profit was flat at ₹165 crore.

Despite the muted financial performance, the company proposed a dividend of ₹3.6 per equity share, including a final dividend of ₹2 and a special dividend of ₹1.6, subject to shareholder approval. 

Data on Stocktwits shows that retail sentiment flipped to ‘bullish’ on this counter from ‘neutral’ a week ago, amid ‘high’ message volumes. 

Finolex Industries shares have fallen 12% year-to-date (YTD).

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