The electrical cables division is the largest amongst these and it contributes about 87% to the top-line and is the main focus area of business for the company. In 80's and the 90's the company used to declare liberal dividends, it used to declare very liberal bonus issues every four years and was one of the pioneers of buybacks. Finolex Industries in which this company owns 33 percent stake has moved up smartly & the market cap of that company moved up from Rs 750 crore to Rs 1,500 crore. And since this company owns 33 percent, the value of that stake works out to Rs 500 crore whereas the market cap of Finolex Cables is about Rs 880 crore
National Optic Fiber Network project is set to get completed in another 36 months.The total project cost is said to be Rs 20,000 crore and huge amount of money is going to flow into optic fiber cable making. Secondly the government is laying more emphasis on actually converting the overhead transmission network into underground power transmission network.This is again very positive for Finolex Cables
The communication cables segment, which had been on de-growth till FY12 primarily due to uncertainty over spectrum allocation leading to no investments by mobile service providers, however, turned around in FY13 and registered a growth of 22.7%.The segment is expected to continue its growth rate of 20% to 25% on the back of recent developments in the telecom sector
National Optic Fiber Network project is set to get completed in another 36 months.The total project cost is said to be Rs 20,000 crore and huge amount of money is going to flow into optic fiber cable making. Secondly the government is laying more emphasis on actually converting the overhead transmission network into underground power transmission network.This is again very positive for Finolex Cables
The communication cables segment, which had been on de-growth till FY12 primarily due to uncertainty over spectrum allocation leading to no investments by mobile service providers, however, turned around in FY13 and registered a growth of 22.7%.The segment is expected to continue its growth rate of 20% to 25% on the back of recent developments in the telecom sector
FCL's electrical cables business has been giving a strong performance over the last four years. However, recently the growth tapered down due to a poor economic environment. The segment supplies cables to the auto and power sector.Improvement in the automobile industry will push this segment back to its old growth trajectory.
FCL has expanded into product segments that are complementary to the electrical cable market, that is, CFLs and electrical switches. In the current fiscal, the company has already launched new lamp models including LED-based lighting systems meant for home use, street lighting and other commercial spaces. This move has brought additional market reach at minimal cost expansion. It also plans to enter the switchgear product segment and will launch a series of products within the MCB, ELCB and MCCB range during 2013-14. Finolex expects to commission a 5MW solar power plant at its Urse facility. This initiative will result in substantial cost savings not only at the plant facility, but also reduce its dependence on grid power for manufacturing operations, effectively putting to use the existing land at the facility for productive purposes.
The FY 13-14 expected eps would be around 14rs. At the cmp of 57 rs, finolex is trading at a forward p/e of 4 and is worth investing as a value pick
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