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Finolex Cables Q3 FY-24 Financials: Revenue Up 6%, Share Price Down 7%

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Finolex Cables Limited, [NSE: FINCABLES, BOM: 500144], an Indian manufacturer of electrical and telecommunication cables has announced its financial results for Q3 of FY-24.

Finolex Cables’ Share Prices 7% down After Announcing Q3 FY-24 Financials

Finolex Cables’ share price tumbled by 6.91% on the day of announcement of its Q3 FY-24 financial results as compared to the previous trading day.

Further, volume of share trades of company peaked at 3,14,000 trades on the day company announced its Q3 FY-24 financials against 2,80,000 trades a day before company announced its results. Therefore, the volume of trades increased by 12.14% on the day Finolex Cables released its financial results.

Finolex Cables’ Standalone Q3 FY-24 Financials

Finolex Cables earned a revenue of Rs. 1,221.68 crore from operations, and Profit After Tax (PAT) of Rs. 127.75 crore during Q3 of FY-24.

Further, Earnings Per Share (EPS) of the company stood at Rs. 8.35 in third quarter of FY-24.

Finolex Cables’ Consolidated Q3 FY-24 Financials

YoY Comparison of Finolex Cables’ Financial Numbers: Q3 FY-24 vs. Q3 FY-23

Finolex cables Revenue Comparison: Q3 FY23 vs. Q3 FY24 vs. Q2 FY24

Finolex Cables reported a Year-over-Year (YoY) increase of 6.20% in its top-line to Rs. 1,221.68 crore during Q3 of FY-24 from Rs. 1,150.31 crore reported during Q3 of FY-23.

PAT of the company stood at Rs. 150.98 crore during Q3 of FY-24. This reflects a slight YoY decrease of 2.16% from the Rs. 154.31 crore PAT clocked during Q3 of FY-23.

Finolex Cable PAT Comparison: Q3 FY23 vs. Q3 FY24 vs. Q2 FY24

Proportionately, Finolex Cables’ EPS decreased to Rs. 9.87 in Q3 of FY-24 against Rs. 10.09 during Q3 of FY-23.

Finolex Cables’ Financials QoQ Comparison: Q3 FY-24 vs. Q2 FY-24

On a Quarter-over-Quarter (QoQ) basis, Finolex Cables’ revenue saw an increase of 2.88% from Rs. 1,187.44 crore reported during second quarter of FY-24.

Finolex Cables’ PAT also showed a downward trend, decreasing by 2.08% from Rs. 154.18 crore during Q2 of FY-24.

Segment-Wise Revenue Comparison of Finolex Cables

Rs. in Crore

Comparison of Finolex cable’s segment-wise Financials: Q3 FY23 vs. Q3 FY24

Electrical cables: Electrical cables segment of Finolex Cables contributed majorly to the company’s revenue during Q3 of FY-24. This segment bought in a revenue of Rs. 1,020.92 crore during Q3 of FY-24 against Rs. 946.83 crore in Q3 of FY-23. This reflects an increase of 7.83% in electrical cables revenue from Q3 FY-23 to Q3 of FY-24.

In its investor presentation for Q3 of FY-24, Finolex Cables mentioned “Volume of electric cable segment improved by 8% with the visible improvement in construction activity. It is expected that this will sustain in upcoming quarters”.

Communication cables: This segment brought in a revenue of Rs. 130.26 crore during Q3 of FY-24 reflecting a decrease of 11.32% YoY from Rs. 146.89 crore recorded during Q3 of FY-23.

Explaining this slump, Mr. Mahesh Viswanathan, Chief Financial Officer of Finolex Cables, elaborated during the company’s earnings call on its Q3 FY-24 results as: The communication cables, which is the second largest group that we have…the volume growth in the metal-based products were kind of flat, whereas there was a decrease in the optic fiber-based products. He added that this was due to delay in a BharatNet-related tender, which is now expected to be floated by the end of February 2024. “That tender is expected to consume approximately 24 million to 25 million Km of fiber over the course of its duration”.

Copper rods: Finolex Cables’ Copper rods revenue jumped by 35.12% YoY, to Rs. 433.37 crore during Q3 of FY-24 from Rs. 320.74 crore clocked during Q3 of previous financial year.

Others: This segment comprises Finolex Cables’ FMEG, switchgear and conduit pipes businesses. For Q3 of FY-24, Others segment contributed a revenue of Rs. 59.89 crore, representing a significant YoY increase of 16.25% from Rs. 51.52 crore in Q3 of FY-23.

Even though the volume of sales in the lighting and conduit category witnessed growth, the company’s lighting sub-segment was hit by “price erosion”.

“Slight Slippage in Margin on the Electrical Cable side” – Finolex Cables CFO

During the company’s earnings call, Mr. Viswanathan said that there was a “slight slippage in margin” considering Finolex Cables’ electrical cables vertical. He added, We had been averaging around 14% over the past 2, 3 quarters. It dropped to 12 in the last quarter, but that’s primarily an issue of product mix rather than anything else.

Elaborating on this point further, Mr. Viswanathan said that the company’s product mix has been impacted on account of increased proportion of auto cables, which is a B2B product offering “little margins”. He also said that demand for wires and cables in the agricultural segment has gone up, which offers limited margins in comparison to standard construction wires. “…Within construction wire, we had more of project-related sales where…while there is a volume, the prices are (lower) when we are trying to sell larger volumes to the building community (because of) higher discounts”, said Mr. Viswanathan.

About Finolex Cables Limited: Pune-based Finolex Cables is a major Indian cable manufacturer and the flagship company of the Finolex Group. Finolex offers a wide range of Electrical and Communication cables. The company has manufacturing facilities at Pimpri and Urse in Pune, Goa, and Roorkee, Uttarakhand.