Finolex Cables Limited — Q4 FY25 earnings call

Call held 2 Jun 2025

Management summary

Finolex Cables delivered a record-breaking PBT in Q4 FY25, recovering from a sluggish second and third quarter. While margins faced pressure from commodity volatility and a shift toward discounted project sales, the company is aggressively expanding its high-margin segments. Significant investments in e-beam technology and optic fiber capacity are expected to drive growth in FY26 and beyond.

Highlights

  • Profit Before Tax (PBT) reached INR 208 crores, the highest quarterly profit recorded by the company.

  • Revenue grew 14% quarter-on-quarter and 35% compared to the immediately preceding quarter.

  • New e-beam facility commissioned in January 2025, with a revenue potential of ₹500-600 crores per year at full capacity.

  • Optic fiber capacity expansion from 4 million km to 6 million km expected by late 2025.

  • Fiber prices recovered significantly from a low of $2.5/km to approximately $3.5/km.

  • FY25 Capex spend stood at ₹236 crores, part of a larger ₹500 crore expansion plan.

  • Sales mix shifted toward project sales (up 8-10% over 3 years), which impacted overall margins due to higher discounting.

  • Effective June 1, 2025, the company implemented a 3% price increase across products.

Concerns

  • Commodity Price Volatility

Key financials

  1. Profit Before Tax ₹208 Cr +14%QoQ
  2. Capex Spend FY25 ₹236 Cr
  3. Net Cost Impact 12.8%
  4. Optic Fiber Market Share 11%

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

  • E-beam Products
    ₹550 Cr Revenue Potential25 years Product Life
  • Optic Fiber
    4 million km Capacity52.5% Utilization3.5 $ Price
  • Harness Segment
    ₹450 Cr Revenue

Guidance & targets

Revenue

  • E-beam Product Revenue Revenue · per year · High confidence ₹500-600 crores
    We expect the plan to generate revenue when it is in full steam of about INR500 crores to INR600 crores per year from these 2 products.

    — Mahesh Viswanathan, CFO

Capacity

  • Optic Fiber Capacity Capacity · FY26 · High confidence 6 million kilometers

    From 4 million kilometers today

    fiber capacity will go up from the current 4 million kilometers to 6 million kilometers.

    — Mahesh Viswanathan, CFO

  • Preform Facility Utilization Capacity · Second Year · Medium confidence 60-70%
    But from the second year onwards, I expect at least a ramp-up to initially 60%, 70%.

    — Mahesh Viswanathan, CFO

Capex

  • Maintenance Capex Capex · Annual · Medium confidence ₹40-50 crores
    Additionally, always, there is a reinstatement capex of about INR40 crores, INR50 crores.

    — Mahesh Viswanathan, CFO

Market Share

  • EHV Market Size Potential Market Share · next 4 to 5 years · Medium confidence $2 billion

    From $500 million today

    current level of the market is about $500 million. And we see that it can grow up to $2 billion in the next 4 to 5 years.

    — Mahesh Viswanathan, CFO

Risks & concerns

  • Commodity Price Volatility

    high

    Volatility in copper and other commodities led to 12 price revisions in a single year, impacting margin stability.

    Management acknowledged

  • Sales Mix Shift to Projects

    medium

    A shift from retail 'standard boxes' to discounted project sales has structurally lowered contribution margins.

    Both acknowledged

  • Long Gestation Periods in EHV

    medium

    EHV projects take 12-24 months to complete, leading to lumpy revenue recognition and long collection cycles.

    Management acknowledged

Areas of evasion (2)

  • Specific margin percentages for the new e-beam products.
  • Detailed breakdown of market share vs specific competitors in EHV.

Q&A highlights

2 direct
Margin profile of new e-beam products Partial
We still have to find the right pricing part for it. They have just been launched... I think it's a little early to talk about that at this moment.

Investors are looking for margin expansion from premium products, but management is currently using attractive launch pricing to build demand.

Asked by Vidit Trivedi

Underperformance versus peers in B2C Direct
I think everyone faced a problem... But subsequently, as others have gotten off the mark quicker than us. That is true. But I think we've done a fairly good fourth quarter.

Management admits to a slower recovery than competitors in the retail segment but claims to have caught up in Q4.

Asked by Manoj Gori

BharatNet project participation Direct
Unfortunately, we did not -- our consortium did not get any place position in those 2 bits. However, many of the winners... have used our manufacturers authorization to place their bids.

While Finolex didn't win directly, they will still benefit as a supplier to the winning bidders, mitigating the loss of direct contracts.

Asked by Vidit Trivedi

2 min read 5 chapters

Detailed narrative

Record Profitability Amidst Margin Headwinds

Finolex Cables reported a record quarterly PBT of ₹208 crores in Q4 FY25. This achievement came despite significant margin pressure throughout the year caused by commodity volatility and a shift in the product mix. Management noted that project sales, which are typically more discounted than retail sales, increased by 8-10% as a percentage of total sales over the last few years, impacting the overall contribution margin.

Strategic Pivot to E-beam Technology

The company commissioned its e-beam facility in January 2025, launching premium building wires and solar cables. These products are designed for a 25-year lifespan and are expected to generate ₹500-600 crores in annual revenue once fully ramped up. Management is currently focused on demand generation with attractive launch pricing, with plans to finalize a long-term pricing policy in the coming months.

Optic Fiber Capacity and Pricing Recovery

The optic fiber segment is seeing a turnaround with global prices firming up from $2.5/km to $3.5/km. Finolex is expanding its fiber capacity from 4 million km to 6 million km, with the new line expected to be commissioned by late 2025. Additionally, a new preform facility is ready for trials, which will enable backward integration and improve margins by reducing reliance on imported preforms.

Capital Expenditure and Future Growth

The company spent ₹236 crores on capex in FY25, bringing the two-year total to nearly ₹400 crores of its ₹500 crore expansion plan. The remaining balance will be deployed in FY26 to close ongoing projects. Beyond this, the company maintains an annual 'reinstatement' capex of ₹40-50 crores and is evaluating further plant expansions that have not yet been officially announced.

EHV and Renewable Energy Outlook

Finolex operates in the Extra High Voltage (EHV) segment through a joint venture, where it sees the domestic market growing from $500 million to $2 billion over the next 4-5 years. While the segment has long gestation periods (12-24 months), the company believes its vertical process technology gives it a competitive edge. The renewable energy sector is also a key driver, particularly for the newly launched e-beam cured solar cables.

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