Finolex Cables Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Finolex Cables delivered a strong Q3 FY26, driven by significant revenue and volume growth across its Wires and Cables segments. The company is actively expanding its OFC capacity and backward integrating into preform manufacturing to capitalize on favorable market dynamics and data center opportunities. While margins faced some pressure this quarter due to product mix and increasing competition, management is focused on operational efficiencies and strategic investments to achieve sustainable long-term growth and margin improvement.

Highlights

  • Q3 FY26 Revenue at ₹1,600 crores, marking a 35% QoQ increase.

  • Wires and Cables segment saw robust volume growth of 25-26%, with Auto cables up 42% and Electric Wires up 28%.

  • OFC volumes grew by almost a third, supported by hardening fiber prices globally from $3 to $5.

  • Cash flow from operations improved significantly to ₹78 crores in Q3 FY26, compared to ₹9 crores in the prior year period.

  • Preform factory is under production trials and expected to be commissioned within FY26, enhancing backward integration.

Concerns

  • Agricultural Applications segment experienced lower performance due to off-season and pricing issues.

  • Cables division EBIT margins dipped to approximately 2.5% in Q3 FY26 from 11.5% in the previous quarter, partly due to product mix.

  • Intensifying competition from new entrants like Birla and Adani is anticipated to put pressure on margins in the future.

Key financials

2 periods

Q3 FY26

  • Revenue
    ₹1,600 Cr
    QoQ +35%
  • EBITDA Growth
    —
    QoQ +12%
  • PAT Growth
    —
    QoQ +10%
  • Cash Flow from Operations
    ₹78 Cr
  • Cables Division EBIT Margin
    2.5%

9M FY26

  • Revenue
    ₹4,370 Cr
    YoY +17%
  • EBITDA Growth
    —
    YoY +17%
  • PAT Growth
    —
    YoY +18%
  • Cash Flow from Operations
    ₹220 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
    25% Volume Growth (Q3 FY26)
  • Electric Wires
    28% Volume Growth (Q3 FY26)
  • Auto Cables
    42% Volume Growth (Q3 FY26)
  • Industrial Cables
    28% Volume Growth (Q3 FY26)
  • Power Cables
    22% Volume Growth (Q3 FY26)
  • Communication Cable (OFC)
    33% Volume Growth (Q3 FY26)
  • Solar Cables
    80% Capacity Utilization

Order book

medium confidence

Composition

  • OFC (product)

Pipeline

other

BharatNet inquiries from participants who have secured positions

OFC volumes were up by almost a third, with global fiber prices hardening. The company is hopeful for adequate business from BharatNet projects over the next two years, despite not having a direct position on tenders. The company's market share in OFC in India is about 11-12%.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹36 Cr
    • Preform factory and Fiber draw expansion ₹307 Cr
    In the quarter, we spent about INR 36 crores and for nine months, it is INR 146 crores in line with the projections that we had made in the beginning of the year so most of those projects should be coming to a solution by now. We had a very good quarter, like I said earlier, and that also reflected in the cash flows. A lot of it is tied up on the preform project so as I mentioned in my opening remarks, at the preform factory right now, production trials are ongoing, and we expect to commission the plant by next month, so when that is done, out of the INR 300 crores, about INR 230 crores or INR 220 crores, somewhere around that will get capitalized, so then you will only be left with what is there for the fiber draw towers, which will get capitalized in the coming quarters.
  • Liquidity Liquidity disclosed Cash flow from operations was about INR 78 crores for the three months, against INR 9 crores in the corresponding period last year and INR 220 crores for the nine months against INR 75 crores in the corresponding period of last year.
    The cash flow from operations was about INR 78 crores for the three months, against INR 9 crores in the corresponding period last year and INR 220 crores for the nine months against INR 75 crores in the corresponding period of last year.

Guidance & targets

Capacity

  • Preform factory commissioning Capacity · within this fiscal (FY26) · High confidence Commissioned
    Currently, the preform factory is under production trials, and we expect to commission it within this fiscal.

    — Mahesh Viswanathan

  • Fiber draw capacity Capacity · by end of Q1 in the coming fiscal (Q1 FY27) · High confidence 8 million kilometers

    From 4 million kilometers today

    We expect to have a fiber draw capacity of about 8 million kilometers by end of Q1 in the coming fiscal.

    — Mahesh Viswanathan

Revenue

  • OFC revenue from additional capacity Revenue · in a full year · Medium confidence INR 600 crores to INR 700 crores
    I think with the additional capacity that we have put up, total revenues from this can go to about anywhere between INR 600 crores to INR 700 crores in a full year.

    — Mahesh Viswanathan

Margin

  • OFC sustainable EBIT margins Margin · long term · Medium confidence 11% and 12%
    I think what should be sustainable would be between 11% and 12%.

    — Mahesh Viswanathan

Investments

  • New investment planning for construction wire Investments · when capacities climb beyond 70% · High confidence Start planning
    Even within the construction wire, as we see capacities climbing beyond 70%, we should start planning for something new.

    — Mahesh Viswanathan

What to watch in Q4 FY26

Preform factory commissioning

Next quarter (Q4 FY26)
Current Under production trials
Target Commissioned

Why it matters

Successful commissioning will enhance backward integration and support OFC expansion.

Currently, the preform factory is under production trials, and we expect to commission it within this fiscal.

Risks & concerns

  • Intensifying competition in wire and cable segment

    high

    New entrants like Birla and Adani are expected to increase competition, particularly in the wire space, which will intensify market pressure.

    Both acknowledged

  • Commodity price volatility (Copper)

    medium

    Copper prices are experiencing 'yoyo' movements, making predictions difficult, though the company aims to pass through costs.

    Management acknowledged

  • Margin pressure due to product mix and competition

    medium

    Cables division EBIT margins dipped to ~2.5% this quarter, partly due to a higher share of lower-margin automobile and industrial products, and expected competition.

    Management acknowledged

  • Dependency on government programs for OFC funding

    medium

    Bulk of OFC funding comes from government programs, which can lead to time lags between announcement, tendering, and execution.

    Management acknowledged

Q&A highlights

7 direct
Commodity price outlook and frequency of price hikes Direct
It's very difficult to predict where it will reach and how long it will stay there. Even in the last couple of weeks, you have seen movements which have taken it up to 14,000, then it's back to 12,800 and then again back to 13,200. It is a bit of a yoyo at this point in time. Difficult to predict how the swings are likely to be. Last quarter, we took 5, with an overall correction of about 12% in the selling prices. This quarter, between January and today, we have already done two changes.

Highlights the volatile raw material environment and the company's strategy to manage it through price corrections.

Asked by Vidit Trivedi

BharatNet project participation and business outlook Partial
we have not secured a direct position on the BharatNet Phase 3 tenders that were floated by BSNL. But given the fiber position in the global market at this point in time, we are getting inquiries from participants who have secured positions, so it's a little too early yet, but we are hopeful that there will be adequate business for us over the next two years from these projects.

Clarifies the company's indirect involvement in a major government project and its potential for future business.

Asked by Vidit Trivedi

Improvement in inventory days and future targets Direct
inventory days. They have improved significantly from 69 to 61 days. That would be a little difficult, I think, what we are trying to do is to look at each segment of the inventory change. So how much should be in raw material, how much in work in process and how much in finished goods, we have been squeezing all 3. I think, two months cycle across the chain is reasonable given the fact that when you get into industrials and automobile cables, the number of SKUs are substantially large.

Shows the company's focus on working capital efficiency and the challenges in further reducing inventory due to product complexity.

Asked by Vidit Trivedi

Breakdown of Capital Work in Progress (CWIP) and commissioning timelines Direct
A lot of it is tied up on the preform project so as I mentioned in my opening remarks, at the preform factory right now, production trials are ongoing, and we expect to commission the plant by next month, so when that is done, out of the INR 300 crores, about INR 230 crores or INR 220 crores, somewhere around that will get capitalized, so then you will only be left with what is there for the fiber draw towers, which will get capitalized in the coming quarters.

Provides clarity on the utilization of significant CWIP, indicating upcoming asset capitalization and operational readiness.

Asked by Vidit Trivedi

Impact of new competition from players like Birla and Adani Direct
Birla side, they are coming in from the cement group. They are putting up a cable wire and cable factory. Our information is that it is likely to get into production more sometime next calendar year. Adani is getting into wire and cables. But yes, there will be competition to a large extent on the wire space, but we do believe that there is sufficient space for players to coexist. Competition will intensify.

Addresses a key industry concern regarding increased competition and management's view on market dynamics.

Asked by Shreya Wazir

Strategy for Telecom Cable business and capitalizing on Data Center opportunities Direct
Data centers will have an impact not just the telecom operations, it will also have an impact on our power cable operations because data centers will be massive consumers of power and they will need fairly heavy sized pipes for power consumption besides fiber as well as land cables. I think our integration backwards into making preforms, expanding our fiber draw capacity, all this is a part of preparing for that additional volumes that are expected to come. The capacity to make those is also available with us at this point in time so again, that is not a big challenge.

Outlines the company's strategic investments in OFC to leverage the growing demand from data centers and reduce import dependence.

Asked by Shreya Wazir

Revenue and margin potential from OFC capacity expansion Direct
I think with the additional capacity that we have put up, total revenues from this can go to about anywhere between INR 600 crores to INR 700 crores in a full year. If you look at our numbers, if you go back and look at our numbers. When utilizations were higher than 75% or so, we have generated margins EBIT margins of around 9-odd percent. It's only in the last three years or so, that number has fallen to the levels they are now 2.5% or so, there is a potential that it can go to about 8%-9%.

Quantifies the financial upside from OFC capacity expansion and provides insight into potential margin recovery.

Asked by Srinivasan

Cables division EBIT margins, reasons for decline, and sustainable levels Direct
Yes, there was a time when we used to do about 15%-16%. But then we brought in distribution. So some money had to be surrendered there to ensure that the distributors' costs are managed. So I think the sustainable level is anywhere between 11% and 12%. Above that, in today's context, with intensified competition is really difficult to sustain. The margins were about 11.5% or so. This quarter, it is dipped a little bit. So it depends on which quarter what takes higher share of the pie. So the mix is also a little bit of an issue.

Explains the historical and current margin trends, including the impact of distribution changes and product mix, setting expectations for future profitability.

Asked by Veenit

2 min read 5 chapters

Detailed narrative

Robust Q3 FY26 Performance Driven by Volume Growth

Finolex Cables reported a strong Q3 FY26 with revenue reaching ₹1,600 crores, marking a 35% quarter-on-quarter increase. The nine-month revenue stood at ₹4,370 crores, up 17% year-on-year. This growth was largely volume-driven, with Wires and Cables volumes increasing by 25-26%. Specific segments like Auto cables saw a 42% volume increase, Electric Wires 28%, Industrial 28%, and Power Cables 22%.

Strategic Expansion and Backward Integration in OFC

The company is aggressively expanding its Optical Fiber Cable (OFC) capabilities. OFC volumes were up by almost a third, benefiting from hardening global fiber prices, which have risen from under $3 to $5 per month. The preform factory is currently undergoing production trials and is expected to be commissioned within FY26. Furthermore, fiber draw capacity is being expanded from 4 million to 8 million kilometers, with the target completion by Q1 FY27, aiming to generate ₹600-700 crores in annual revenue from this additional capacity.

Margin Dynamics and Competitive Landscape

Cables division EBIT margins dipped to approximately 2.5% in Q3 FY26 from 11.5% in the prior quarter. This was attributed to a change in product mix, with a higher share of lower-margin automobile and industrial products. Management acknowledges intensifying competition from new entrants like Birla and Adani, which will put pressure on margins. However, the company aims for sustainable EBIT margins of 11-12% by focusing on channel motivation and emphasizing product quality and life cycle costs.

Capital Expenditure and Future Investment Plans

Capital expenditure for Q3 FY26 was ₹36 crores, bringing the nine-month total to ₹146 crores. A significant portion of the capital work in progress, approximately ₹220-230 crores out of ₹307 crores, is allocated to the preform project, expected to be capitalized next month. As capacity utilization for construction wire climbs beyond 70%, the company plans to initiate new investments, with a planning-to-execution timeline of about a year and a half.

Improved Cash Flow and Working Capital Management

Cash flow from operations saw a substantial improvement, reaching ₹78 crores in Q3 FY26 compared to ₹9 crores in the corresponding period last year. For the nine-month period, it stood at ₹220 crores versus ₹75 crores last year. The company also reported an improvement in inventory days, reducing from 69 to 61 days, by actively managing raw material, work-in-process, and finished goods, aiming for a reasonable two-month cycle across the supply chain.

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