📌 At a Glance
Finolex Cables has been around since the time your dad installed that giant CRT TV. It owns a solid 25% of India’s organized wire market and throws off cash like Diwali crackers — but after peaking at ₹1,700, it’s now chilling near ₹938. Is this the quiet compounding king? Or just another slow-moving industrial story with spark but no fire?
🧵 1. Business Wires: What Does Finolex Actually Do?
Finolex isn’t just about copper wires anymore.
| Segment | Products |
|---|---|
| 🧰 Electrical Cables | House wires, industrial cables, flexible cords |
| 🌐 Telecom Cables | Optical fibre, LAN, coaxial, jelly-filled cables |
| ⚡ FMEG Products | Fans, switches, lights, geysers, water heaters |
| 🏠 Appliances (new vertical) | Small appliances like irons, extension boards etc. |
- 🧱 Dominates the retail wires segment
- 📈 Expanding in B2B and infra projects
- 🔋 Recently launched e-beam cables for solar and EV
But 80%+ of revenue still comes from just wires. FMEG? Still beta testing in real life.
💸 2. Financials: Strong Core, But Voltage Fluctuating
📊 FY25 Snapshot
| Metric | Value (₹ Cr) |
|---|---|
| Revenue | 5,319 |
| Net Profit | 701 |
| OPM (%) | 10% |
| ROE (%) | 13.4% |
| ROCE (%) | 17.6% |
| Other Income | ₹429 Cr |
| Dividend Yield | 0.85% |
Let that sink in: Out of ₹922 Cr PBT… ₹429 Cr is just “Other Income.”
Basically, Finolex is half cable company, half bond portfolio.
🧮 3. Valuation — Shocking or Grounded?
| Metric | Value |
|---|---|
| EPS (FY25) | ₹45.82 |
| P/E | 20.5 |
| Book Value | ₹359 |
| P/B Ratio | 2.6x |
| Market Cap | ₹14,357 Cr |
🎯 Fair Value Range (Based on P/E 15–18x):
- Low Case: ₹45.8 × 15 = ₹687
- High Case: ₹45.8 × 18 = ₹825
📉 CMP = ₹938 → Still overvalued 10–20%, especially considering that half the profit isn’t from operations.
⚔️ 4. Peer Check: Who’s the Real Wire Boss?
| Company | P/E | ROCE (%) | Sales (₹ Cr) | Net Profit (₹ Cr) |
|---|---|---|---|---|
| Finolex | 20.5 | 17.6 | 5,319 | 701 |
| Polycab | 45.3 | 29.7 | 27,943 | 3,015 |
| KEI | 49.4 | 21.3 | 11,532 | 875 |
| RR Kabel | 48.2 | 20.2 | 8,100 | 535 |
Finolex looks cheap — but that’s because it’s not growing as fast.
- 3-Year Sales CAGR: 12%
- 3-Year PAT CAGR: 5%
- Working Capital Days? Ballooneyed to 225 🤯
📦 5. What’s Holding Back Finolex?
- 😴 FMEG is underwhelming — still <5% of sales
- 💼 Zero exports compared to Polycab/KEI
- 🧮 High dependency on interest/dividend income → Not sustainable for rerating
- 🐢 No major capex or margin-expanding innovation
Even the e-beam cable update sounds like a post-AGM filler.
💰 6. But It’s Not All Dim…
✅ Debt-free balance sheet
✅ ₹4,000 Cr+ investment book
✅ Promoters are steady at 36%
✅ Consistent dividend (₹8 per share FY25)
✅ Brand recall is legendary in Tier 2/3 India
Finolex is like that uncle who owns 3 shops, 2 flats, and 1 mutual fund — not flashy, but solid.
🧠 7. TL;DR — Buy the Company, Not the Price?
Finolex has:
- 🔌 A monopoly-ish hold in retail wires
- 💹 Margins that refuse to die
- 🧮 Income from investments that are propping up PAT
- 🧃 FMEG that hasn’t juiced up yet
But at ₹938, you’re paying for a growth story that’s still charging.
🎯 Our Fair Value = ₹687 – ₹825
Until then… switch off the greed. Plug into patience.
✍️ Written by Prashant | 📅 19 June 2025
Tags: Finolex Cables, wire stocks India, Polycab vs Finolex, cable company stocks, EduInvesting analysis, undervalued stocks, FMEG growth, fair value analysis, other income red flags, Indian electrical sector
