Finolex Cables Shares Rise As Jefferies Remains Bullish
Jefferies remained bullish as Finolex Cables is 'a good play on housing, construction'.
Finolex Cables Ltd.'s share price rose over 5% after a bullish review from Jefferies.
The brokerage has maintained a 'buy' rating on the stock after the company beat its fourth quarter estimates. "Q4 was a slight beat to JEFe, led by higher sales (+14% YoY), Post +12-13% total price hike in FY25, FNXC has taken a small price hike in end-May25. Company expects decent OFC business from winners of Bharatnet. 5G roll-out and data centers are opportunities in communication." The brokerage estimates more than 19% PAT CAGR over FY25-28e, with over 370 bps ROCE expansion.
Jefferies remained bullish as Finolex Cables is "a good play on housing, construction".
Within volume growth, electrical wires grew 7%, communication cables grew 50%, while optic Fiber cable volumes rose by 30%. The brokerage expects electricals category to remain the key growth driver, and sales CAGR of more than 13% over FY25-28.
"Company has hiked prices by lower single-digit in end-May 25. FY25 witnessed steep copper volatility, and saw 12 price revisions owing to pass-through impact. Net price rise of 12-13% was seen in FY25," Jefferies noted.
Construction slowdown, sharp volatility in copper prices, lower traction in FMEG segment, and family dispute within the Finolex group are some of the key risks, according to the brokerage.
Outlook
While electricals will spearhead growth, communication, particularly OFCs have potential for growth, according to Jefferies. "Communication (esp Optic Fiber Cables OFC) can see healthy opportunity, with impending SG roll-out in India. Company is not facing any capacity constraint as of now. FMEG is showing positive EBIT, with sales at Rs 260 crore."
Share Price Today
Share price for Finolex Cables rose much as 5.49% to Rs 1,012 apiece, the highest level since Feb. 13, 2025. It pared gains to trade 5.27% higher at Rs 1,009.95 apiece, as of 9:20 a.m. This compares to a 0.14% decline in the NSE Nifty 50.
The stock has fallen 14.69% on a year-to-date basis, and 31.24% in the last 12 months. Total traded volume so far in the day stood at 5.7 times its 30-day average. The relative strength index was at 38.69.
Out of eight analysts tracking the company, five maintain a 'buy' rating, two recommend a 'hold' and one suggests 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 21.7%.
