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Finolex Cables’ Q2 Profit Down 61.75% YoY, Clocks 1,090 Cr. Revenue

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Finolex Cables Limited [NSE: FINCABLES, BOM: 500144], an Indian cables and copper rods manufacturing company, has announced its financial results for second quarter of the 2022-23 financial year.

Finolex Cables’ Standalone Financials for Q2 of FY-23

Finolex reported a standalone revenue of Rs. 1,090.83 crore from its operations for the quarter ended 30th September 2022.

Standalone Profit After Tax (PAT) of the company was Rs. 136.72 crore for Q2 of FY-23.

Consolidated Financial Numbers of Finolex Cables

YoY Comparison of Finolex Cables’ Financial Results: Q2 FY-23 vs. Q2 FY-22

Finolex Cables reported Rs. 1,090.83 crore as its consolidated revenue from operation for the second quarter of FY-23. This is a 16.92% Year-over-Year (YoY) increase from the Rs. 932.98 crore revenue clocked by the company during Q2 of the previous fiscal.

The company’s consolidated PAT showed a downward trend, slumping by 61.75% on a YoY basis to Rs. 55.37 crore in Q2 of FY-23. During the corresponding period in the previous financial year, this figure stood at Rs. 144.77 crore.

Comparison of Finolex Cables’ Financials: Q2 FY-22 vs. Q2 FY-23 vs. Q1 FY-23

QoQ Comparison of Finolex Cables’ Financials: Q2 FY-23 vs. Q1 FY-23

On a Quarter-over-Quarter (QoQ) basis, the company registered a slight increase of 7.40% in its revenue from operations, which stood at Rs. 1,015.65 crore for Q1 of the ongoing fiscal.

PAT of the company tanked by 53.70% QoQ from Rs. 119.60 crore clocked during the quarter ended 30th June 2022.

Finolex Cables’ Segment-wise Revenue

Comparison of Finolex Cables’ Segment-wise Revenue: Q2 FY-22 vs. Q2 FY-23 vs. Q1 FY-23

Electrical Cables: Revenue from this segment forms the largest share of Finolex Cables’ total revenue. In the second quarter of 2022-23 financial year, Finolex’s electrical cables business brought in about 80.53% of the revenue earned by the company.

On a YoY basis, Q2 revenue from this segment saw a 12.07% rise, to Rs. 878.40 crore in the current fiscal from Rs. 783.79 crore during FY-22.

QoQ, this figure remained almost steady with a slight increase of 6.28%, from the Rs. 826.51 crore revenue clocked on account of this segment during the opening quarter of FY-23.

Communication Cables: Finolex Cables’ communication cables segment contributed Rs. 158.63 crore to the company’s Q2 revenue in FY-23, as against Rs. 96.93 crore during the corresponding period of FY-22. This reflects a significant YoY jump of 63.65% in revenue from this segment.

In comparison, from Q1 to Q2 of the current financial year, revenue from communication cables segment rose by a healthy 18.77%, from Rs. 133.56 crore.

Copper Rods: This segment saw the highest YoY increase in Q2 revenue, which was by 64.78% to Rs. 261.60 crore in FY-23 from Rs. 158.76 crore during FY-22.

Finolex Cables’ revenue from this segment dropped by 12.58% on a QoQ basis, from Rs. 299.25 crore clocked during the quarter ended 30th June 2022.

Others: This segment covers Finolex Cables’ FMEG, switchgear and conduit pipes businesses.

On a YoY basis, the company’s Q2 revenue from this segment remained largely the same, increasing by a meagre 1.51% to Rs. 48.26 crore in FY-23 from Rs. 47.54 crore during FY-22.

From Q1 to Q2 of the ongoing fiscal, revenue from this segment shrunk slightly by 3.97%. The company had reported a revenue of Rs. 50.26 crore from this segment for the quarter ended 30th June 2022.

Company’s Insights on its Financial Performance for Q2 of FY-23

In an investor presentation, Finolex Cables credited the YoY increase in revenue to the performance of its distribution network.

The electrical cables segment grew by 10% in sales volume YoY, while this number stood at 24% for metal-based products in the communication cables segment, and 100% for the optical fibre cables. With this increase in volume, sales of the company are close to pre-pandemic levels.

Commenting on the reduced margins in the company’s electrical cables business, Finolex Cables’ CFO, Mr. Mahesh Viswanathan said, “While all the product baskets grew, there was a fairly high growth on the automobile sector and cables which go into the automobile sector that growth was fairly significant”. He explained that despite high volume of sales, margins from sales in the automobile industry are fairly slim. He continued, “And likewise, we’d also seen growth in the industrial products and there again the margins are not as healthy as you would see on the retail products. And that pulled down the margins by about 80 to 100 basis points.

For the FMEG segment, volume of sales was hit by inflation in raw material prices, as well as changes in Bureau of Energy Efficiency (BEE) norms which led to de-stocking of electrical fans.

About Finolex Cables Ltd.: Finolex Cables is a major player in the Indian cable industry. The company has manufacturing facilities at Pimpri and Urse in Pune, Goa and Roorkee, Uttarakhand. For the 2021-22 financial year, the company reported a turnover of Rs. 3,839.56 crore.