Finolex Cables
Finolex Cables
Industrial ProductsKey Fundamentals
SmallcapCables - ElectricalsIndustrial ProductsTapetide Score
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Key Insights
Strengths
3- Company is almost debt free.
- Company is expected to give good quarter
- Company has been maintaining a healthy dividend payout of 18.5%
Weaknesses
2- Company has a low return on equity of 13.2% over last 3 years.
- Earnings include an other income of Rs.382 Cr.
Growth Rate
AI Analysis — Bull vs Bear
Finolex Cables has a market cap of about Rs 22,470 Cr and trades at a P/E of 28.3 and a P/B of 3.71. Recent momentum is strong: TTM sales grew 27% and TTM profit grew 29%, well above its 10-year CAGRs of 10% and 9%. The company is almost debt free, but its return on equity is modest at 12-14%, and Rs 382 Cr of other income makes up a large share of reported earnings.
- TTM sales growth of 27% is more than double the 3-year sales CAGR of 12% and the 10-year CAGR of 10%, so the top line is growing much faster than its historical rate.
- TTM profit growth of 29% is ahead of the 27% sales growth, which suggests operating leverage or margin improvement in the latest period. It also beats the 5-year and 10-year profit CAGRs of 9%.
- The company is almost debt free. With implied shareholders' equity of about Rs 6,056 Cr (market cap of Rs 22,470 Cr divided by a P/B of 3.71), it has balance-sheet flexibility for capex or to handle downturns without leverage risk.
- The 5-year compounded sales growth of 18% shows sustained demand beyond the latest year, compared with a 10-year CAGR of 10%.
- ROE has been steady at 14% over both 5 and 10 years, showing consistent capital efficiency through business cycles, with no sharp drops.
- The stock has compounded at 24% over 5 years and 13% over 10 years, and it rose 78% in the last year, showing a sustained market re-rating alongside earnings growth.
- The company keeps a dividend payout of 18.5% while staying almost debt free. Shareholders get a 0.61% yield, and most earnings are retained for reinvestment.
- Other income of Rs 382 Cr is about 48% of implied earnings of roughly Rs 794 Cr (market cap of Rs 22,470 Cr divided by a P/E of 28.3). Core operating profit is therefore much smaller than the headline figure, and the effective P/E on operating earnings is much higher.
- ROE is low at 13.2% over the last 3 years and has slipped to 12% in the last year, below the 5-year and 10-year average of 14%. A large, low-yielding cash and investment base appears to be diluting returns.
- A P/B of 3.71 against an ROE of only 12-13% means the market is paying a large premium to book for mid-range returns on equity.
- A P/E of 28.3 is a rich multiple next to 5-year and 10-year profit CAGRs of just 9%. The valuation relies on the recent 29% TTM profit growth continuing.
- Over 5 years, profit grew at a 9% CAGR while sales grew at 18%. This points to margin compression over the period, possibly from input costs like copper or a shift in product mix.
- The stock's 78% gain in 1 year contrasts with only a 9% CAGR over 3 years. Returns have been uneven, and the recent rally may already reflect much of the improvement in earnings.
- A dividend yield of 0.61% and a payout of 18.5% are modest for an almost debt-free company. Shareholders get limited cash returns while surplus capital weighs on ROE.
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
- OFC margins set to moderate Sep 11
Per Informist, optical fibre cable margins are expected to fall to 15-18% from 25-28% as capacity scales. That would ease one of the main drivers behind the recent earnings jump.
- Fibre price normalisation risk Sep 9
Standard fibre prices rose from $5-6/km in Dec 2025 to $17-18/km by mid-2026 and have already eased to $11-13/km. Jefferies warns prices could normalise further as AI-led demand settles and cheaper legacy raw-material inventory runs out.
- Stock trading above Jefferies target Sep 11
At ₹1,449, the stock is above Jefferies' ₹1,410 target, which already assumes 23x forward PE, a 15% premium to its 5-year average. After a 39% one-month gain, near-term upside looks limited without estimate upgrades.
- Communication surge may not last Sep 9
Jefferies expects communication segment growth to normalise after the current spike. Communication EBIT margin went from 1% to about 30% YoY in the June 2026 quarter, a level that may be hard to sustain.
- One analyst holds a Sell Sep 9
Of 7 analysts covering the stock, 6 rate it Buy and 1 rates it Sell, so the bullish view is not unanimous after a 60% rally in 2026.
- Fresh 52-week high, sharp rally Sep 11
The stock hit a new 52-week high of ₹1,450 on Sep 11, up 39% in a month and about 60% in 2026. On Sep 9 it had gained nearly 6% to ₹1,376 intraday.
- Jefferies Buy, 22% EBITDA CAGR Sep 9
Jefferies kept its Buy rating with a ₹1,410 target and estimates sales and EBITDA will compound at 17% and 22% over FY26-29E. It sees the stock's 21x one-year forward PE as a discount to peers.
- OFC margin surge lifts earnings Sep 9
Communication segment EBIT margin reached about 30% in the June 2026 quarter, up from 1% a year earlier. The segment is about 9% of sales but contributed about 23% of quarterly EBIT.
- Fibre capacity doubling by Dec-26 Sep 9
Fibre-draw capacity is set to double from 4 million to 8 million km by Q3FY27. Jefferies estimates this could add ₹200-250 crore in quarterly sales at about $11/km, potentially rising toward ₹300 crore per quarter.
- Electricals capacity headroom Sep 9
Electricals make up about 85% of sales, and utilisation could rise from about 66% in FY26 to 80-85%, supporting about 15% extra sales growth without major capex. Jefferies models a 17% electricals revenue CAGR for FY26-29E.
- Technical breakout, ₹1,720 target Sep 11
Angel One recommends buying at ₹1,410-1,418 with a ₹1,710-1,720 target and a ₹1,165 stop loss, citing the stock reclaiming its 20/50 EMA on the monthly chart. The stock broke out above ₹1,360-1,370 resistance with RSI near 68.
- EHV JV, solar, exports scaling Sep 9
The Sumitomo EHV JV earned ₹24 crore profit in FY26, posted ₹87 crore sales in Q1, and has an order book of about ₹300 crore. Q1 exports were about ₹50 crore, with ₹30-40 crore from higher-margin OFC exports to the US and Europe, and a second solar e-beam line has been ordered.
- Solid FY26 financial profile Sep 11
FY26 revenue grew 17.59%, ahead of the 12.02% 3-year CAGR, with interest costs below 1% of revenue. The latest quarter showed total income of ₹1,983.76 crore and PAT of ₹249.04 crore.
- 58th AGM, all resolutions passed Sep 29
Finolex Cables held its 58th AGM by video conference on Sep 28, 2026, and shareholders approved all 8 resolutions, including the dividend and director re-appointments.
- Analyst and investor meet held Sep 4
The company scheduled an analyst and investor meeting for Sep 9 at 9:00 am, the same day Jefferies reiterated its Buy rating and the stock rose nearly 6%.
- FY26 BRSR filed Sep 5
The FY26 Business Responsibility and Sustainability Report shows a 23% drop in Scope 1 emissions, along with employee welfare and safety disclosures.
TL;DR: Finolex Cables is on strong momentum, up about 60% in 2026 to a 52-week high of ₹1,450. AI-driven optical fibre demand has lifted communication EBIT margins to about 30%, while the electricals core, which is about 85% of sales, still has utilisation headroom. The main risks are falling fibre prices, a guided cut in OFC margins to 15-18%, and a share price already above Jefferies' ₹1,410 target. Trend: improving but stretched. Upside from here likely depends on the 8 million km fibre expansion arriving on time by Dec 2026 and electricals growth offsetting the expected normalisation of the OFC windfall.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 1,204 | 1,187 | 1,222 | 1,401 | 1,230 | 1,312 | 1,182 | 1,595 | 1,396 | 1,376 | 1,599 | 1,951 | 2,013 |
| Expenses | 1,058 | 1,041 | 1,088 | 1,239 | 1,104 | 1,206 | 1,044 | 1,424 | 1,259 | 1,231 | 1,441 | 1,771 | 1,769 |
| Operating Profit | 146 | 146 | 134 | 162 | 127 | 106 | 138 | 171 | 136 | 145 | 158 | 180 | 244 |
| OPM % | 12% | 12% | 11% | 12% | 10% | 8% | 12% | 11% | 10% | 11% | 10% | 9% | 12% |
| Other Income | 74 | 72 | 75 | 100 | 202 | 57 | 67 | 104 | 80 | 76 | 74 | 140 | 92 |
| Interest | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Depreciation | 10 | 11 | 11 | 12 | 11 | 12 | 12 | 12 | 14 | 14 | 15 | 17 | 22 |
| PBT | 210 | 206 | 198 | 250 | 318 | 151 | 193 | 261 | 203 | 206 | 216 | 303 | 314 |
| Tax % | 24% | 25% | 24% | 25% | 23% | 22% | 24% | 27% | 20% | 21% | 24% | 26% | 21% |
| Net Profit | 160 | 154 | 151 | 186 | 244 | 118 | 147 | 192 | 163 | 163 | 164 | 224 | 249 |
| EPS in Rs | 10.49 | 10.08 | 9.87 | 12.17 | 15.95 | 7.71 | 9.63 | 12.54 | 10.63 | 10.63 | 10.73 | 14.67 | 16.28 |
Profit & Loss
| Particulars | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 2,360 | 2,445 | 2,815 | 3,078 | 2,877 | 2,768 | 3,768 | 4,481 | 5,014 | 5,319 | 6,321 | 6,939 |
| Expenses | 2,002 | 2,049 | 2,374 | 2,604 | 2,494 | 2,398 | 3,339 | 3,972 | 4,426 | 4,776 | 5,701 | 6,211 |
| Operating Profit | 358 | 396 | 441 | 474 | 384 | 370 | 429 | 509 | 588 | 543 | 620 | 727 |
| OPM % | 15% | 16% | 16% | 15% | 13% | 13% | 11% | 11% | 12% | 10% | 10% | 10% |
| Other Income | 125 | 160 | 153 | 178 | 169 | 300 | 398 | 188 | 321 | 428 | 370 | 382 |
| Interest | 9 | 4 | 1 | 1 | 2 | 1 | 2 | 1 | 2 | 2 | 2 | 2 |
| Depreciation | 58 | 48 | 44 | 41 | 39 | 39 | 39 | 46 | 44 | 47 | 59 | 67 |
| PBT | 416 | 504 | 549 | 610 | 512 | 631 | 787 | 649 | 864 | 922 | 929 | 1,040 |
| Tax % | 21% | 21% | 40% | 33% | 24% | 27% | 24% | 22% | 25% | 24% | 23% | — |
| Net Profit | 329 | 400 | 330 | 407 | 391 | 461 | 599 | 504 | 652 | 701 | 714 | 800 |
| EPS in Rs | 21.49 | 26.17 | 21.58 | 26.64 | 25.57 | 30.17 | 39.18 | 32.97 | 42.61 | 45.82 | 46.67 | 52.31 |
| Div. Payout % | 14% | 11% | 19% | 17% | 22% | 18% | 15% | 21% | 19% | 17% | 19% | — |
Balance Sheet
| Particulars | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 31 | 31 | 31 | 31 | 31 | 31 | 31 | 31 | 31 | 31 | 31 |
| Reserves | 1,745 | 2,110 | 2,398 | 2,706 | 2,973 | 3,384 | 3,891 | 4,340 | 4,915 | 5,465 | 6,055 |
| Borrowings | 51 | 1 | 1 | 1 | 8 | 7 | 9 | 14 | 18 | 20 | 19 |
| Other Liabilities | 272 | 297 | 354 | 417 | 395 | 464 | 563 | 596 | 671 | 771 | 885 |
| Total Liabilities | 2,099 | 2,440 | 2,784 | 3,154 | 3,407 | 3,886 | 4,494 | 4,980 | 5,635 | 6,287 | 6,990 |
| Fixed Assets | 432 | 415 | 409 | 404 | 387 | 394 | 380 | 435 | 444 | 583 | 848 |
| CWIP | 3 | 8 | 5 | 10 | 27 | 26 | 87 | 21 | 168 | 210 | 107 |
| Investments | 881 | 1,159 | 1,523 | 1,767 | 1,121 | 1,571 | 2,014 | 2,610 | 3,584 | 3,986 | 4,195 |
| Other Assets | 783 | 857 | 847 | 973 | 1,872 | 1,894 | 2,013 | 1,915 | 1,439 | 1,507 | 1,840 |
| Total Assets | 2,099 | 2,440 | 2,784 | 3,154 | 3,407 | 3,886 | 4,494 | 4,980 | 5,635 | 6,287 | 6,990 |
Cash Flow
| Particulars | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 339 | 213 | 236 | 154 | 309 | 114 | 473 | 356 | 577 | 207 | 49 |
| Investing | -195 | -126 | -134 | -110 | 587 | -859 | -378 | -225 | -440 | -82 | 153 |
| Financing | -64 | -75 | -57 | -75 | -86 | -86 | -87 | -97 | -112 | -128 | -129 |
| Net Cash Flow | 81 | 11 | 44 | -30 | 810 | -831 | 8 | 35 | 26 | -3 | 73 |
| Free Cash Flow | 327 | 178 | 199 | 110 | 277 | 59 | 406 | 325 | 577 | -29 | -105 |
| CFO/OP | 114 | 86 | 84 | 67 | 109 | 63 | 141 | 96 | 125 | 64 | 32 |
Ratios
| Particulars | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 19 | 19 | 23 | 25 | 24 | 23 | 17 | 18 | 13 | 17 | 21 |
| Inventory Days | 70 | 98 | 90 | 95 | 104 | 134 | 80 | 69 | 53 | 61 | 73 |
| Days Payable | 19 | 40 | 32 | 34 | 28 | 31 | 23 | 21 | 22 | 21 | 16 |
| Cash Conversion Cycle | 70 | 76 | 80 | 86 | 100 | 126 | 74 | 66 | 45 | 57 | 78 |
| Working Capital Days | 45 | 52 | 60 | 73 | 82 | 202 | 159 | 120 | 68 | 59 | 62 |
| ROCE % | — | 26% | 24% | 24% | 18% | 20% | 21% | 16% | 19% | 18% | 16% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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Company Information
Finolex Cables Limited is a leading manufacturer of electrical and telecommunication cables in India. Operating for more than 50 years, Finolex has been able to maintain its leadership position as one of the most diversified wires and cables companies in the country. Besides manufacturing a wide variety of wires and cables, Finolex has also forayed into the manufacturing of Fast-Moving Electrical Goods (FMEG) and home appliances. Over the years, the Company has established itself as a preferred electrical solutions provider for retail and institutional markets in India and created a strong brand name. [1]
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