Buy Finolex Cables; target of Rs 660: Sharekhan

Sharekhan's research report on Finolex Cables

The communication cables segment has immense growth potential, given India’s focus on network connectivity and broadband penetration through optic fibre cables (OFC). Further, scalability in EHV, power cables, and FMEG would boost revenue and earnings growth. We expect decent volume growth in Q3FY2023E, driven by the construction, auto, and industrial sectors. Sequential margin expansion is likely led by higher volumes. Improving margin trajectory, zero debt, healthy cash and investments of ~Rs. 1,350 crore and tight working capital management give us further comfort.

Outlook

We retain our Buy rating on Finolex Cables Limited (Finolex) with revised PT of Rs. 660, as we believe its valuation should catch up with its peers, given improving product mix and strong long-term growth prospects.

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Finolex Cables - 05 -01-2023 - khan