Investors Rejoice as Finolex Cables Stock Hits Record High

"Healthy Q4 Results Propel Finolex Cables Stock Up 19%"

Shares of Finolex Cables reached a record high of Rs 1,361.95, surging 19% on the BSE during Friday's intra-day trading amid heavy volumes. This surge followed the company's strong operational performance in the March quarter (Q4FY24) and the board's recommendation of a 400% dividend, i.e., Rs 8 per share on a face value of Rs 2.

Over the past three trading days, the stock of India's leading manufacturer of electrical and communication cables has rallied 29%. It was trading 17% higher at Rs 1,337.25, compared to a mere 0.02 percent rise in the S&P BSE Sensex. The average trading volumes for the stock jumped more than eightfold, with a combined 4.7 million equity shares, representing 3.1 percent of the total equity of Finolex Cables, changing hands on the NSE and BSE.

In Q4FY24, the company's profit before taxes grew 13% year-on-year (YoY) to Rs 196.1 crore, driven by volume growth in major segments, new product introductions, and some pricing actions to maintain margins. Revenue rose 15% YoY to Rs 1,401 crore from Rs 1,224 crore a year earlier. Profit after tax increased by 9% YoY to Rs 146 crore.

In volume terms, Electrical Wires increased by 15% compared to Q4FY23, while Cables improved by 50%. Within the Communication Cables segment, most product lines saw a volume increase of around 14%. Volumes in new products within the Fast-Moving Electrical Goods (FMEG) sector also showed healthy growth from the corresponding quarter. While all products contributed to positive margins, lighting products continued to be affected by price erosion, according to Finolex Cables.

The management reported that the recently announced plans to set up an Electron Beam (E-Beam) facility and a Preform manufacturing plant are progressing well. The first E-Beam equipment is now undergoing commissioning and is expected to be operational soon, with the second equipment anticipated to arrive in the next few weeks. Market offerings from these facilities are expected to start by August/September 2024.