Views on Finolex Cables 2QFY2016 Results: Angel Broking

Views of Mr. Milan Desai (Research Analyst - Mid Caps, Angel Broking) on Finolex Cables 2QFY2016 Results:

Finolex Cables result below expectations

"Finolex cables reported numbers that were below our estimates. The top-line declined by 4.9% YoY to INR 605cr, same was below our estimate of INR 691cr. The de-growth was on account of lower commodity prices which was passed on resulting in lower realizations. In terms of volume growth, Electrical Cables posted modest growth numbers while that of Communication Cables was more than 20%. The raw material cost declined by 178bp YoY to 72.1% of sales but the same was negated by 59bp YoY increase in employee cost to 4.3% of sales and 131bp YoY increase in other expenses to 11.1% of sales. This resulted in EBITDA margin contracting by 12bp to 12.5%. Other income during the quarter declined by 24.4% YoY to INR28cr, but the same was in-line with our estimate of INR 27cr. As a result, the net profit declined by 17.8% YoY to INR65cr against INR 79cr in the same quarter of the previous year. We had built in bottom-line estimate of INR 80cr.

Currently, we have a NEUTRAL rating on the stock and considering that the numbers have come in below our expectations. We will revisit our numbers post management discussion and we may change the rating post interaction."

Shares of FINOLEX CABLES LTD. was last trading in BSE at Rs.248.25 as compared to the previous close of Rs. 248.95. The total number of shares traded during the day was 13647 in over 702 trades.

The stock hit an intraday high of Rs. 257.45 and intraday low of 247. The net turnover during the day was Rs. 3419213.

Source : Equity Bulls

Keywords