Shares of Finolex Cables Ltd were in focus after the company outlined growth plans across its cable and FMEG businesses and reaffirmed that promoter disputes have not disrupted operations.
The company expects double-digit growth in its core electrical cables segment and projects revenue from communication cables to reach ₹750 crore in FY28, supported by capacity expansion.
With a market capitalisation of ₹17,758 crore, Finolex Cables was trading around ₹1,161 per share, about 2% below its 52-week high of ₹1,185. The stock trades at a price-to-earnings ratio of 24.9, compared with the industry average of 26.4.
Electrical cables business eyes double-digit growth
Management said the company aims to maintain double-digit growth in its electrical cables business.
Demand trends and ongoing expansion initiatives are expected to support growth in the segment.
The company also expects industry consolidation over time, with around five to six large players likely to dominate the market.
Communication cables capacity to come on stream in FY27
Finolex expects the communication cables business to benefit from additional capacity that will become operational in the second half of FY27.
Following the expansion, management expects revenue from the segment to reach around ₹750 crore in FY28.
The company sees communication cables as an important contributor to future growth.
FMEG revenue seen rising in FY27
The company expects revenue from its Fast-Moving Electrical Goods (FMEG) business to increase to about ₹400 crore in FY27.
The segment generated revenue of ₹270 crore in FY26.
Growth is expected to be driven by:
- Expansion of the product portfolio.
- Wider market reach.
- Diversification beyond the core cables business.
Margins expected to remain stable
Management indicated that blended margins for FY27 are likely to remain around 12%.
The company treats changes in metal prices as a pass-through.
However, management said there could be a small lag before fluctuations in raw material costs are reflected in product prices.
₹300 crore capex planned for FY27
Finolex said its strong cash position provides flexibility for both acquisitions and capital expenditure.
The company has planned ₹300 crore of capital expenditure in FY27, which will be funded through internal accruals.
Management also said it would evaluate the Crompton Greaves asset as part of its growth strategy.
Promoter disputes have not affected operations
The company said ongoing disputes among promoters have not impacted day-to-day operations.
According to management, the following activities continue without disruption:
- Expansion projects.
- Investment plans.
- Growth initiatives.
- Regular business operations.
Finolex said it remains focused on executing its long-term strategy despite the disputes.
Key guidance and targets
| Segment | Target/Outlook |
|---|---|
| Electrical cables | Double-digit growth |
| Communication cables | Revenue of ₹750 crore by FY28 |
| FMEG business | Revenue of ₹400 crore in FY27 |
| FY27 blended margin | Around 12% |
| FY27 capex | ₹300 crore |
TL;DR:
Finolex Cables expects double-digit growth in its electrical cables business and aims to generate ₹750 crore from communication cables by FY28. The company has planned ₹300 crore capex for FY27 and says promoter disputes have not affected business operations.
AI Summary
- Finolex Cables expects double-digit growth in its core cables business.
- Communication cables revenue is projected to reach ₹750 crore by FY28.
- FMEG revenue is expected to rise to ₹400 crore in FY27.
- The company plans ₹300 crore capex in FY27.
- Management said promoter disputes have not disrupted operations.