Anand Rathi's research report on Finolex Cables
Continuous decline in copper prices from end-May till Aug, leftover highcost Q1 inventory and destocking impacted Finolex Cables’ Q2. Multiple price cuts during Q2 dented margins. Anticipating stable copper prices, we see the electrical cable segment doing well in H2. Also, OFC with BharatNet appears to be a huge opportunity, where the pick-up in floating tenders would add to volumes and drive growth in communication cables.
Outlook
Capex for OFC and auto wires is on track and would help to capitalise on rising demand. Also, the healthy balance sheet and strong cashflows are positives. We maintain a Buy rating, with a lower 12-mth TP of Rs1,577.
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