Finolex Cables

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.

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.

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.

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.

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%.