1. At a Glance
India’s wiring Godfather, Finolex Cables, controls nearlyone-fourth of the organized wire industryand still manages to keep its balance sheet cleaner than your WhatsApp after “Delete for Everyone.” Debt-free, dividend-paying, and a master of cash-hoarding, this Pune-based veteran has been pulling copper strings for over 50 years. The latest quarter shows13% PAT growth— though management’s expansion plan is taking longer than your builder’s “3-month” possession promise.
2. Introduction
If Indian homes had a Hall of Fame for brands, Finolex would sit right next to Parle-G and Ambuja Cement. Born in the 1950s when wires were luxury items, the company now stretches across cables, FMEG (fast-moving electrical goods), and appliances.
The brand equity is so strong that for many electricians, “Finolex” means “wire” — just like “Xerox” means “photocopy.” The company’s latest act? A 400% dividend announcement, ensuring shareholders get their yearly mithai box in time for Diwali.
But while the business hums along, competitors like Polycab and KEI are busy running marathons in revenue growth. Finolex still enjoys premium margins but needs a bit more voltage in its topline acceleration.
3. Business Model – WTF Do They Even Do?
Finolex Cables manufactures:
- Electrical Cables:House wires, flexible cables, power cables.
- Communication Cables:LAN, coaxial, optical fiber.
- FMEG Products:Switches, fans, lighting, water heaters.
Distribution:4,000+ dealers and 30,000+ retailers across India. Strong presence in retail & institutional supply, with brand recall that makes marketing costs look tiny.
Moat:
- Brand trust (built over decades).
- Nationwide distribution.
- Quality consistency.
Roast note: Imagine selling the same product category for half a century, maintaining market leadership,andavoiding the “debt-trap” drama — Finolex’s management could teach Bollywood stars a thing or two about longevity.
4. Financials Overview
Latest Annual (FY25)
- Revenue:₹5,319 Cr (+6%
- YoY)
- EBITDA:₹514 Cr (EBITDA Margin ~10%)
- PAT:₹544 Cr (-5% YoY)
- EPS (TTM):₹36.66
- P/E:~23x
Q1 FY26:
- Revenue: ₹1,395.5 Cr (+13% YoY)
- PAT: ₹138.8 Cr (+13% YoY)
- EPS: ₹9.08
P/E Recalc:
- Q1 EPS ₹9.08 × 4 = ₹36.32 annualized.
- CMP ₹840 ÷ 36.32 =23.1x(matches Screener).
Commentary:The company’s profits are heavily supported by other income (₹255 Cr in FY25) — which is like padding your gym gains with a good haircut.
5. Valuation (Fair Value RANGE)
Method 1 – P/E Approach
- Industry P/E median: ~29x.
- Applying 20–25x to EPS ₹36.32 → ₹726 – ₹908.
Method 2 – EV/EBITDA Approach
- EBITDA FY25: ₹514 Cr.
- EV/EBITDA range: 12–14x → EV ₹6,168 – ₹7,196 Cr.
- Less Debt (₹20 Cr), add Cash/Investments (~₹2,770 Cr) → Equity Value: ₹8,918 – ₹9,946 Cr.
- Per Share (~1.53 Cr shares): ₹583 – ₹650.
Method 3 – DCF (Simplified)
- FCF est. ~₹350 Cr, growth 8% for 5 yrs, discount 11%, terminal 4% → ₹820 – ₹880.
| Method | FV Low | FV High |
|---|---|---|
| P/E | 726 | 908 |
| EV/EBITDA | 583 | 650 |
| DCF | 820 | 880 |
Fair Value
