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    Finolex Cables

    FINCABLES
    Capital Goods·29 May 2026
    Management Summary

    Finolex Cables reported strong Q4 and FY26 results, driven by robust performance in the electrical and communication cables segments. The JV with Sumitomo turned profitable, and the new preform plant was commissioned. However, margins faced pressure from rising raw material costs and geopolitical volatility, while housing wires and FMEG segments showed subdued growth. Management expressed caution regarding future guidance due to ongoing supply chain challenges and market uncertainty.

    Highlights

    5

    • Q4 Revenue up 22% YoY and QoQ, with FY26 Revenue up 19%.

    • Electrical sector achieved its highest-ever quarterly revenue of INR 1,697 crores, growing 22% YoY and 21% QoQ.

    • Communication Cables segment saw a strong Q4 with 30% growth YoY and QoQ.

    • The JV with Sumitomo turned profitable, reporting INR 21 crores profit on INR 450 crores revenue.

    • Preform plant commissioned and performing 'quite encouragingly', with fiber draw capacity set to double to 8 million km by end of Q2 FY27.

    Concerns

    4

    • Q4 margins were under pressure due to Middle East disturbances, raw material cost increases, and rupee depreciation.

    • Housing wires volumes were impacted by copper price volatility and trade stocking resistance.

    • Supply chain challenges for fiber and germanium, with restrictions on imports from Europe/China, pose raw material availability issues.

    • The FMEG segment, particularly the fan business, underperformed due to unseasonal rains and BIS norm changes.

    Key financials

    Metrics

    9

    Periods

    3

    Q4 QoQ

    3
    • Revenue Growth
      22%
    • EBITDA Growth
      22%
    • PAT Growth
      19%

    Q4 YoY

    3
    • Revenue Growth
      22%
    • EBITDA Growth
      7.0%
    • PAT Growth
      6%

    FY26 YoY

    3
    • Revenue Growth
      19%
    • EBITDA Growth
      14.0%
    • PAT Growth
      14.0%

    Segment breakdown

    Revenue Growth (Q4 YoY)Revenue Growth (Q4 QoQ)Revenue Growth (FY26 YoY)
    Electrical Sector22%21%22%
    Communication Cables30%30%0%
    JV with Sumitomo———
    Heatmap· 3 shared metrics

    Order Book

    medium confidence

    Composition

    JV Order Book (start of year)(other)
    ₹ 380 crores

    "The JV started the year with an order book of INR 380 crores. Communication Cables has long-term yearly contracts, with one major contract up for renewal in June."

    Source:
    Prepared remarks

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹300 crores

    M&A

    Sumitomo JV

    joint venture · integrated

    Liquidity

    Liquidity disclosed

    Cash flow from operations was about INR 50 crores lower than last year. Inventory is up by about INR 300 crores due to prebuying.

    Guidance & targets

    10
    CategoryTargetPriority
    Capacity
    Communication Cable Revenue Potential (after capacity expansion)
    beyond INR 750 crores
    		Medium
    Capacity
    Communication Cable Fiber Draw Capacity
    8 million kilometers
    		High
    Capacity
    Solar Capacity
    doubling
    		High
    Capacity Utilization
    Electrical Segment Revenue Growth (without major investments)
    another 15%
    		Medium
    Profitability
    Communication Cable EBIT
    do better than 6%
    		Medium
    Exports
    Export Revenue Share
    2% to 3%
    		Medium
    Preform Plant
    Preform Plant Benefit Kick-in
    end of quarter 2 or maybe quarter 3
    		High
    Preform Plant
    Preform Plant Margin Benefit
    5% and 10% better than market
    		Medium
    Operating Costs
    Other expenses and employee costs as % of sales
    similar to FY26
    		High
    Volume Growth
    Communication Volume Growth (FY25 to FY26)
    About 7%
    		High

    Preform plant stabilization and margin benefits

    End of Q2 or Q3 FY27
    CurrentCommissioned, 'quite encouraging' performance
    TargetBenefits kicking in, 5-10% better than market margins

    Why it matters

    Successful stabilization and realization of margin benefits from the preform plant are crucial for communication cable segment profitability.

    I expect that benefit to kick in from the earliest I can talk about the end of quarter 2 or maybe quarter 3.

    How to verify

    guidance_and_targets[metric='Preform Plant Benefit Kick-in']

    Risks & concerns

    5
    RiskSeverity

    Geopolitical disturbances (Middle East)

    Resulted in cost increases across the board and put pressure on margins in Q4. — Management acknowledged

    high

    Raw material price volatility (copper, fiber) and supply chain challenges (germanium, imports from Europe/China)

    Led to higher production costs, inventory build-up, and difficulty in securing critical materials like fiber and germanium. — Management acknowledged

    high

    Rupee depreciation

    Contributed to increased production costs and margin pressure. — Management acknowledged

    medium

    Housing wires volume decline due to trade stocking issues

    Copper price volatility made distributors hesitant to invest in stocking, impacting retail sales. — Management acknowledged

    medium

    Fan business underperformance due to external factors

    Impacted by unseasonal rains and changes in BIS norms, leading to destocking and no volume growth. — Management acknowledged

    low

    Q&A highlights

    8

    “I think we will get a little more clarity once there is some finite information about what's happening in the Middle East. That keeps spooking the market every other day. And to predict what we will end up with at the end of '27, even though it is not a long-term prediction, is a little difficult at this point in time.”

    Highlights the uncertainty in the communication cable segment due to geopolitical events and supply chain, impacting future margin predictability despite current opportunities.

    asked by Manoj Gori

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q4 and FY26 Performance Driven by Electrical Segment

    Finolex Cables reported a robust Q4 FY26 with revenue increasing by 22% both year-on-year and quarter-on-quarter, contributing to a 19% revenue growth for the full FY26. The electrical sector was a primary driver, achieving its highest-ever quarterly revenue of INR 1,697 crores, marking a 22% YoY and 21% QoQ increase. This segment's EBIT also saw significant growth, up 17% YoY and 30% QoQ, with FY26 EBIT improving by 18%.

    02

    Communication Cables Segment Sees Q4 Surge, Strategic Capacity Expansion

    While the communication cables segment's revenue was flat for the full FY26, it experienced a strong Q4, growing 30% both year-on-year and quarter-on-quarter. The company commissioned its preform plant, with benefits expected to kick in from Q2 or Q3 FY27, potentially yielding 5-10% better margins than market rates. Fiber draw capacity is set to double from 4 million kilometers to 8 million kilometers by the end of Q2 FY27, aiming for a revenue potential beyond INR 750 crores.

    03

    JV with Sumitomo Turns Profitable, Capex Plans for FY27

    The joint venture with Sumitomo achieved profitability in FY26, reporting a profit of INR 21 crores on a revenue of INR 450 crores, with an opening order book of INR 380 crores. For FY27, Finolex Cables plans a total capital expenditure of INR 300 crores, comprising INR 200 crores for general capacity expansion and an additional INR 100 crores to complete the optic fiber preform-related capex.

    04

    Margin Pressure and Supply Chain Headwinds

    Despite strong top-line growth, Q4 margins faced pressure due to geopolitical disturbances in the Middle East, leading to increased raw material costs and rupee depreciation. This resulted in higher production costs, with EBITDA improving by a more modest 7% YoY and PAT by 6% YoY in Q4. The company also saw a INR 300 crore increase in inventory due to strategic pre-buying to mitigate supply chain risks.

    05

    Challenges in Housing Wires and FMEG Segments

    The housing wires segment experienced subdued volume growth due to frequent copper price increases, which deterred trade stocking by distributors. The FMEG segment also underperformed, with the fan business particularly affected by unseasonal rains and changes in BIS norms. Management is undertaking a strategic review of the FMEG product portfolio, team, and distribution to improve its performance.

    06

    Cautious Outlook Amidst Volatility and Raw Material Scarcity

    Management refrained from providing specific FY27 guidance due to the volatile geopolitical situation and ongoing supply chain challenges, particularly concerning fiber and germanium availability. They noted that raw material availability is a global constraint, with restrictions on exports from Europe and China. The company is prioritizing internal consumption of its preform due to this scarcity.

    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.