Finolex Cables Skyrockets 19% To Hit Record High As Robust Q4 Numbers Impress D-Street

Finolex Cables shares on May 24 skyrocketed 19 per cent to hit an all-time high of Rs 1,361 apiece after the company reported a healthy operational performance for the March quarter (Q4FY24). The board also recommended a dividend of 400 per cent i.e. Rs 8 per share on face value of Rs 2.

In the past three trading days, the stock of India’s largest and leading manufacturer of electrical and communication cables maker has rallied 29 per cent. At 10:56 am; the stock was trading 17 per cent higher at Rs 1,337.25, as compared to 0.02 per cent rise in the S&P BSE Sensex. The average trading volumes at the counter jumped over eight-fold. A combined 4.7 million equity shares representing 3.1 per cent of total equity of Finolex Cables had changed hands on the NSE and BSE.

In Q4FY24, the company’s profit before taxes grew 13 per cent year-on-year (YoY) to Rs 196.1 crore on back of volume-led growth in the major segments, new product introductions as well as some pricing actions to maintain margins.

Revenue rose 15 per cent YoY to Rs 1,401 crore from Rs 1,224 crore a year ago. Profit after tax was up 9 per cent YoY to Rs 146 crore.

In volume terms, Electrical Wires increased by 15 per cent compared to Q4FY23, while Cables improved by 50 per cent. Within the Communication Cables segment, most product lines increased in volume, by an average of 14 per cent.

Volumes in new products within the fast-moving electric goods (FMEG) sector all showed healthy growth from the corresponding quarter. While all products contributed to positive margins, lighting products continued to be affected by price erosion, Finolex Cables said.

The management said the previously announced plans to set up an E-Beam facility and Preform manufacturing plant are progressing well. The first of the E-Beam equipment is currently under commissioning and is expected to be in production shortly; the second equipment is expected to arrive in the next few weeks. It is expected that market offering should start by August/September 2024. As reported earlier, Phase I of the Preform facility should be operational by Jan/Feb 2025, the management said.

Finolex Cables is the largest manufacturer of electrical and telecommunication cables. The company’s wire and cable products are used in applications such as automobiles, lighting, cable TV, telephone, and computers for industrial applications. Finolex has added electrical switches, LED-based lamps, fans, low-voltage MCBs, and water heaters to its product range.

So far this year, shares of Finolex Cables have rallied over 23 per cent, outpacing 5 per cent rise in the benchmark Nifty 50 index during the same period.