Q1 2027 Finolex Cables Limited Earnings Call Transcript
Key Points
- Finolex Cables Ltd (BOM:500144) reported a strong Q1 FY27 with revenue growth of 44% year-over-year to Rs 2,013 crore and PAT growth of 59% to Rs 221 crore, driven by robust volume-led growth in automotive, solar, and agricultural cables.
- The communication cable segment delivered exceptional performance, with revenue up 62% to Rs 176 crore and margins near 30%, benefiting from high fiber prices and strong demand from data centers and AI applications.
- Exports emerged as a key growth driver, with revenue of Rs 50 crore in Q1, nearly matching the entire previous year's total, including high-margin optic fiber cable exports to the US and Europe.
- The company is expanding its fiber draw tower capacity from 4 million to 8 million kilometers in one go, with completion expected by September, positioning it to capitalize on the global fiber shortage and growing data center demand.
- The backward integration into preform production is progressing, with the facility now operational and expected to stabilize in the coming months, supporting long-term margin improvement in the communication cable segment.
- The copper rod segment was severely impacted, with revenue plummeting to Rs 8 crore from Rs 403 crore in Q1 FY26, due to continued restrictions on LPG availability, forcing the plant to remain shut during the quarter.
- Building wire volumes saw only low single-digit growth, as channel inventory destocking and high copper prices weighed on demand, with management noting that channel inventory at quarter-end was low.
- The exceptionally high communication cable margins (near 30%) are not sustainable, as they were boosted by low-cost raw material inventory; margins are expected to normalize to low double-digits once the inventory is consumed.
- Supply chain disruptions, including fuel and PVC availability issues, increased costs during the quarter, impacting the FMEG segment (fans, conduit pipes) and limiting growth despite a hot summer season.
- The FMEG business remains a weak link, with growth constrained by raw material shortages and pricing pressures, making the FY28 target of Rs 5 billion revenue challenging, though management remains confident.
Ladies and gentlemen, good day and welcome to the Q1 FY27 Earnings Conference Call of Penolex Cables Ltd. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes.
Should you need any assistance during this conference, please signal for an operator by pressing followed by 0 on your touchtone telephones.
I now hand the conference over to Mr. Pranay Prem kumar from Densu One Investor Relations team.
Thank you and over to you, sir.
Thank you, Para.
Good evening and thank you all for joining us on the Finolex Cables Q1 FY27 Earnings Conference Call.
Today we have with us Mr. Mahesh Vishwanathan, CEO from Finolex Cables Limited.
We will begin the call with the opening remarks from the management, after which we will have the forum open for the interactive Q&A session.
I must remind you that the discussion in today's earnings call may include
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