Kamlesh Kotak, Head of Research at AMSEC told CNBC-TV18, "Finolex Cables has been battered down but the numbers on prima facie look to be weak but actually the numbers have been pretty strong. The topline has been muted because of the polymer price softening and they have a pass through on their electric cable side; however the bottom line was dragged down by 32 percent. There were some extraordinary write-downs on account of the assets and investment impairment losses. If you adjust for the same, their earnings before interest, tax, depreciation and amortization (EBITDA) margin is pretty strong at 15 percent plus," he said.
"On the balance sheet front also, the company has done commendable job of working capital coming down to 59 days. They are a net debt-free company with a cash pile of Rs 400 crore and utilisation is also pretty low at around 60 percent. So, going forward if you see the demand really picking up, the company should be positioned well to capture that growth. So, despite the weak numbers expect the stock to deliver good numbers going forward, so it is a buy on our rating," he added.
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