Cable Stock Targets Double Digit Growth; Eyes ₹750 Cr Communication Cables Revenue by FY28

Synopsis: Finolex Cables expects growth across key businesses, supported by capacity expansion, planned investments, stable margins, and acquisition opportunities, while maintaining that promoter disputes have not affected business operations. 

The shares of this small cap company majorly engaged in manufacturing of electrical and telecommunication cables in India were in focus after the management targets double digit growth in its cable business. 

With the market capitalization of Rs. 17,758 Crores, the shares of Finolex Cables Ltd were trading at around Rs. 1161 per share which is 2 percent discount from its 52 week high of Rs. 1185 per share and is trading at a P/E of 24.9 whereas industry P/E stands at 26.4

Electrical Cables Business Targets Strong Growth  

Finolex Cables said it aspires to grow its electrical cables business at a double-digit rate going forward. The company remains focused on strengthening its position in its core segment and believes demand trends and expansion initiatives will support growth. Management also stated that the industry is likely to consolidate over time, with around 5-6 large players expected to dominate the market.

Communication Cables Expansion to Drive Revenue

The company expects its communication cables business to benefit from enhanced capacities that will become operational in the second half of FY27. Following the expansion, management expects revenue from the communication cables segment to reach around Rs. 750 crore in FY28, highlighting the importance of the segment in the company’s future growth plans.

FMEG Business Continues to Scale Up

Finolex expects revenue from its Fast-Moving Electrical Goods (FMEG) business to increase to around Rs. 400 crore in FY27, compared with Rs. 270 crore in FY26. The company believes the segment will continue to gain traction as it expands its product portfolio and market reach, helping diversify revenue beyond its traditional cables business.

Margins Expected to Remain Stable

Management indicated that the blended margin for FY27 should hover around 12 percent . The company treats fluctuations in metal prices as a pass-through, although there can be a small lag before higher or lower costs are reflected in product pricing. This approach is expected to help maintain profitability despite volatility in raw material prices.

Strong Cash Position Supports Growth Plans

Finolex said it is sitting on a sizable cash balance that can be used for inorganic growth opportunities as well as capital expenditure. The company confirmed a planned FY27 capex of Rs. 300 crore, which will be funded through internal accruals. Management also stated that it is interested in and will evaluate the Crompton Greaves asset as part of its growth strategy.

Business Operations Unaffected by Promoter Disputes

The company clarified that ongoing disputes between promoters have not impacted its business operations. According to management, day-to-day functioning, expansion projects, investment plans, and growth initiatives continue without disruption, allowing the company to remain focused on executing its long-term strategy.

Conclusion:

Finolex Cables remains focused on expanding its core businesses while strengthening its presence in adjacent segments. The company is pursuing growth through capacity additions, product diversification, and selective expansion opportunities. Management expects industry consolidation to create a more structured competitive landscape and believes the company is well positioned to benefit from it. Despite ongoing promoter disputes, Finolex maintains that business operations remain stable, allowing it to stay focused on its long-term growth strategy.

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