Finolex Cables - Q4FY13 Result Review - Angel Broking

Finolex Cables Ltd. (FCL) mixed set of numbers for 4QFY2013. Top-line reported flat yoy growth of 4.5% to Rs. 632cr, in line with our estimate of Rs. 629cr. Electrical cables (EC) and communication cables (CC) segments grew by 7.8% and 35.9% while copper rods (CR) segment registered a decline of 42.2% on yoy basis. EBITDA grew by 14.4% yoy to Rs. 67cr while EBITDA margin expanded by 91 basis points yoy to 10.5%. Expansion was mainly due to reduction in selling, administration and other expenses as percentage of sales. EBIT margin expanded for all the segments; EC by 105bp, CC by 315bp and CR by 234bp yoy. However, Net profit for the company declined by 12.6% yoy to Rs. 39cr owing to tax expense of 16% of PBT which was absent for the quarter previous year.

Annual top-line growth came in at 10% to Rs. 2,270cr. EC and CC segments grew by 15.9% and 22.6% while CR segment registered a decline of 49.0%. EBITDA for FY2013, grew by 30.9% to Rs. 229cr, while EBITDA margin expanded by 160 basis points to 10.1%. EBIT margin for EC and CC expanded by 79 bp and 626bp respectively while declined for CR segment by 66bp. On the back of reduced interest cost and lower exceptional losses on derivatives contract, Net profit grew by whooping 47.9% to Rs. 145cr, while margin expanded by 164 bp to 6.4%.

As we rollover to FY2015E, we maintain our Buy recommendation on the stock with revised target price of Rs. 68 based on target PE of 6x for FY2015E earnings.

Source : Equity Bulls

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