Finolex Cables’ operating momentum is shifting in favour of margins rather than revenue, and Anand Rathi believes this transition could support a meaningful re-rating. In a new report, the brokerage reiterated a Buy on the company with a target price of Rs 975 per share, implying nearly 30% upside from current levels. The brokerage said the company is entering a phase where backward integration, better copper-rod performance and associate income are together strengthening profitability even as communication-cable demand stays subdued.
Anand Rathi on Finolex Cables: Margin expansion offsets slower sales
To arrive at its Rs 975 target, the brokerage valued the core business at 20x September 2027 estimated earnings and added the associate stake after applying a holding-company discount. It trimmed FY26–28 revenue forecasts by 2–3.5% but made only minor cuts to EBITDA and PAT estimates because operating leverage is improving.
The brokerage said the company’s margin profile is changing for the better. The fibre preform facility is ready for trials and the fibre-draw tower is expected to be commissioned by March 2026, lowering input costs in communication cables once these assets ramp up.
Anand Rathi on Finolex Cables: Quarterly numbers highlight the shift
For FY26, the brokerage expects revenue of Rs 5,725 crore (Rs 57,250 million), EBITDA of Rs 588.2 crore and PAT of Rs 540.4 crore. At the current reference price, this implies a FY26 P/E of about 15.4x.
Q2 revenue increased to Rs 1,375.8 crore from the earlier period. EBITDA margin widened to 10.5% from 7%, taking EBITDA to Rs 145.1 crore. PAT rose to Rs 124.5 crore. Electric cables contributed 64% of revenue, copper rods 26% and communication cables 6%.
Anand Rathi on Finolex Cables: Integration and copper-rod performance support margins
Copper-rod revenue grew strongly year-on-year, aiding margins. Capex in Q2 reached Rs 75 crore (Rs 750 million), taking first-half capex to Rs 100 crore, mostly for backward-integration projects.
Associate income also lifted profitability. Share of profit from Finolex Industries jumped to Rs 38.1 crore (Rs 381 million), a gain the brokerage said should be monitored given its growing weight in quarterly earnings.
Anand Rathi on Finolex Cables: Weakness persists in communication cables
Communication-cable revenue fell 21.4% year-on-year in Q2 due to weak fibre prices and delays in BharatNet and state tenders. The segment operated at about 60% capacity, reflecting low order visibility. The brokerage said demand recovery depends on how quickly these procurement cycles restart.
Anand Rathi on Finolex Cables: Industrial demand and FMEG expansion offer balance
Industrial-cable volumes grew strongly, supported by manufacturing, infrastructure and solar projects. Building-wire and agriculture cables remained weak because monsoon conditions affected rural demand. The company also plans to expand its consumer-electrical portfolio with launches in fans, lighting and switches, which could help margins over time.
Anand Rathi on Finolex Cables: Key risks and what to watch next
The brokerage said raw-material volatility, fluctuations in associate income and any delays in commissioning integration projects are the main risks. Slower tender activity could extend revenue pressure in communication cables.
For now, Anand Rathi believes margin resilience outweighs short-term sales weakness. That, it said, justifies the Buy rating and the Rs 975 target even with muted near-term demand.
