Skip to content

    Finolex Cables

    FINCABLESGood
    Capital Goods·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

    8

    • 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

    1

    • Commodity Price Volatility

    Key financials

    Single quarter

    04 metrics
    1. 01Profit Before Tax₹208 Cr+14.0%QoQ
    2. 02Capex Spend FY25₹236 Cr
    3. 03Net Cost Impact12.8%
    4. 04Optic Fiber Market Share11%

    Segment breakdown

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

    Guidance & targets

    5
    CategoryTargetPriority
    Revenue
    E-beam Product Revenue
    ₹500-600 crores
    		High
    Capacity
    Optic Fiber Capacity
    6 million kilometers
    		High
    Capacity
    Preform Facility Utilization
    60-70%
    		Medium
    Capex
    Maintenance Capex
    ₹40-50 crores
    		Medium
    Market Share
    EHV Market Size Potential
    $2 billion
    		Medium

    Risks & concerns

    5
    RiskSeverity

    Commodity Price Volatility

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

    high

    Sales Mix Shift to Projects

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

    medium

    Long Gestation Periods in EHV

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

    medium

    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

    3

    “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

    2 min read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.