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Please refer to important disclosures at the end of this report
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Finolex Cables Ltd (FCL), the flagship company of the Finolex Group is
India's largest and leading manufacturer of electrical and telecommunication
cables. Strong positioning in cables/wires segment has helped FCL build a
well-diversified business with exposure to multiple sectorsinfra, power,
telecom, etc. Further the government’s focus on rural electrification with the
objective to make power available to all will remain positive for company’s
growth. A new manufacturing unit in the North, we believe, will help the
company re-position itself stronger in the region. Plans are also afoot to
diversify FCL’s product portfolio beyond cables to include fans and
switchgears, which are sold through its EWC products distribution channel.
Management plans to expand its product basket to improve its ‘channel
sweating’ where the company proposes to simultaneously ramp up existing
sales of outsourced products like LED lighting products, switchgears and
lighting fixtures in a phased manner. FCL has reported top-line of 6% CAGR
and a healthy bottom-line of 32% CAGR over FY2012-17. Further, the
company’s debt/equity ratio has improved from 0.28 in FY2012 to 0.1 in
FY2017 and also the cash flow has improved from `206.34cr in FY2012 to
`351.87cr in FY2017.FCL’s operating margin has also improved 932bps
from 8.39% in 2012 to 17.71% in FY2017.FCL has reported RoE of 18.67%
and valuation P/E 24.49x of FY17 TTM earnings. Hence Buy.
BUY
CMP `685
0.7
Reuters Code
FNXC.NS
FNXC:IN
2
BSE Sensex
33,442
Nifty
10,328
Face Value (`)
Electric Equipment
Market Cap (` cr)
10,714
52 Week High / Low
721/400
Avg. Daily Volume
23,264
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Finolex Cables Ltd
Others | Electric Equipment
Dec 15, 2017
2
Finolex Cable Ltd |Electric Equipment
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Finolex Cable
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)