Finolex Cables Limited — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Finolex Cables delivered a quarter of mixed results, characterized by strong bottom-line growth (PAT up 35%) despite a muted top-line performance (Revenue up 5%). The company faced significant headwinds in its agricultural segment due to a prolonged monsoon and underperformed peers in the building wire segment. While industrial cable volumes were a bright spot, the communication segment struggled with low margins and a lack of success in recent BharatNet tenders.

Highlights

  • Revenue grew by a modest 5% YoY for the quarter and 9% for H1 FY26.

  • EBITDA for the quarter increased by 26% YoY, while PAT rose by 35% YoY.

  • Wires and Cables segment revenue grew 8% YoY, though building wire growth remained flat due to real estate moderation.

  • Industrial cables and solar applications saw strong growth, with cable volumes up nearly 60% in the quarter.

  • Communication cable segment faced headwinds with EBITDA declining nearly 51% YoY due to low fiber prices and muted volumes.

  • Capex of ₹100 crores incurred in H1 FY26, primarily for the preform and fiber draw plants.

  • Net working capital days increased to 33 days in H1 FY26 from 22 days in H1 FY25, driven by lower payables.

  • Management maintained a long-term target for the FMEG segment to reach ₹500 crores by 2028.

Concerns

  • Communication segment margin pressure

Key financials

  1. Revenue — +5%YoY
  2. EBITDA — +26%YoY
  3. PAT — +35%YoY
  4. Working Capital Days 33 days +50%YoY
  5. Capex ₹100 Cr

What they filed

Q1 FY27: revenue up 44.2%, net profit up 59.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,312 1,182 1,595 1,396 1,376 +5%1,599 +35%1,951 +22%2,013 +44%
EBITDA99 129 166 131 143 +44%153 +19%203 +22%248 +89%
Net profit146 124 152 139 187 +28%136 +10%161 +6%221 +59%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Wires and Cables
    8% Revenue Growth60% Volume Growth (Cables)
  • Communication Cables
    -51% EBITDA Growth5% Margin
  • FMEG
    ₹20 Cr Ad and Promotion Spend

Guidance & targets

Revenue

  • FMEG Segment Revenue Revenue · by 2028 · Medium confidence 500 crores
    Broadly, we are committed to this segment and we made a statement somewhere saying that we would reach a number of INR 500 crores by 2028 or so and I think that target is still within reach.

    — Mahesh Viswanathan, Deputy CEO & CFO

Capex

  • Preform and Fiber Draw Plant Completion Capex · March 2026 · High confidence Completion
    Both the major spends that we had announced one year ago would then be completed by March '26.

    — Mahesh Viswanathan, Deputy CEO & CFO

Margin

  • Communication Segment Margin Margin · Post-stabilization · Medium confidence 8-10%
    I think once the preform plant and the additional fiber draw stabilizes... it can go back to the traditional margin levels that we used to have. I think that used to be around 8% to 10% levels.

    — Mahesh Viswanathan, Deputy CEO & CFO

Risks & concerns

  • Communication segment margin pressure

    high

    Margins are currently in lower single digits due to low fiber prices and low utilization.

    Both acknowledged

  • Competition from new large entrants

    medium

    Analysts questioned the entry of UltraTech into the market; management relies on brand strength to protect turf.

    Analyst downplayed

  • Prolonged monsoon impact

    medium

    Agricultural applications (10-12% of revenue) were depressed due to weather.

    Management acknowledged

Areas of evasion (2)

  • Specific guidance for FY26 and FY27
  • Status of the ongoing shareholder legal case

Q&A highlights

2 direct
Top-line growth underperformance vs peers Direct
We are a rather small player on the cable side... Whereas some of our peers are fairly big on that, and their focus is on that so, that is one big differentiator. The second... the prolonged monsoon also hit us on the agricultural applications.

Explains why Finolex is lagging behind competitors who are seeing double-digit growth.

Asked by Vidit Trivedi

Failure to win BharatNet tenders Direct
There were 16 tenders which were floated, out of which 12 have been ordered to the suppliers... While we participated in the tenders, we were not successful in any of the tenders.

Reveals a significant execution/competitive gap in a key government-driven growth area.

Asked by Balasubramanian

Peak revenue capability and utilization Partial
All I can say at this point in time is my utilization is approximately just slightly under 70%. That is for the electrical cables.

Indicates significant headroom for growth without further major capex, but highlights current underutilization.

Asked by Darshika Khemka

2 min read 5 chapters

Detailed narrative

Segmental Performance and Market Headwinds

The Wires and Cables segment saw an 8% revenue increase, but this was tempered by flat growth in building wires as the real estate sector moderated. The agricultural segment, which contributes 10-12% of total revenue, was hit hard by a prolonged monsoon, leading to depressed volumes. Conversely, industrial cables and solar applications performed well, with cable volumes surging by nearly 60% during the quarter.

Communication Cables and the BharatNet Challenge

The communication cable segment faced a difficult quarter with EBITDA declining 51% YoY and margins compressed into the low single digits. Management admitted that the company was unsuccessful in securing any of the 12 BharatNet tenders awarded to date. They are now pinning hopes on upcoming retenders in September and state-level tenders expected in the next two to four months.

Capex Progress and Margin Accretion

Finolex spent ₹75 crores on capex in Q2, bringing the H1 total to ₹100 crores. The preform plant is ready for production trials, and the fiber draw plant is expected to be completed by March 2026. Management expects these facilities to be margin-accretive by saving on import duties (5%) and improving efficiency, potentially returning segment margins to the 8-10% range.

FMEG Strategy and Long-term Targets

The FMEG business, including fans, lighting, and switchgear, faced headwinds from the monsoon and price erosion in LEDs. Despite missing internal targets previously, management reiterated their goal of reaching ₹500 crores in revenue from this segment by 2028. In-house manufacturing for FMEG remains a long-term plan but is not expected to commence within the current fiscal year.

Financial Health and Working Capital

Net working capital days increased to 33 days, primarily due to a cyclical reduction in payables rather than a deterioration in collections. Receivables remain healthy at 15 days, while inventory was intentionally held higher at 65 days to mitigate potential site disruptions. The company maintains a strong balance sheet with capacity utilization for electrical cables currently sitting just under 70%.

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