Finolex Cables Ltd's Q2FY19 standalone net profit declines 6.78% yoy to Rs92.91cr: Misses Estimates

The company’s standalone revenue in the period stood at Rs713.97cr, up 3.78% yoy but down 9.76% qoq.

Nov 14, 2018 11:11 IST India Infoline Research Team

Finolex Cables Ltd Q2FY19

Standalone Results Q2FY19: (in Rs cr)

Q2FY19 YoY (%)
Revenue 713.97 3.8
EBITDA 85.84 [13.2]
EBITDA Margin (%) 12 [235]
Net Profit (adjusted) 92.91 [6.8]
***EBITDA margin change is bps
Finolex Cables Ltd’s Q2FY19 results were below the consensus estimates on EBITDA and profit fronts. Standalone revenue for the quarter under review rose 3.8% yoy to Rs714cr, missing the estimates by 7.4%. Operating profit declined 13.2% yoy to Rs85.8cr vs. Rs98.8cr in Q2FY18, 27.9% below the street estimates. EBITDA margin contracted 235bps yoy to 12% in Q2FY19. Profit after tax declined from Rs99.7cr in Q2FY18 to Rs92.9cr in Q2FY19, missing the estimates by 5.2%.
  • Profitability parameters felt pressure mainly owing to muted top-line.
  • Revenues from Electrical Cables segment were flat at Rs562.6cr for the September quarter. Segment’s EBIT declined by 16% yoy to Rs61.9cr while margin stood at 11% in Q2FY19 (down from 13.1% in Q2FY18). The segment contributed 64.5% to the top-line during the quarter.
  • Communication Cables’ sale was up 14.3% yoy to Rs128.8cr, while EBIT rose just 2.2% yoy to Rs16.9cr for the quarter under consideration. EBIT margin declined from 14.7% in Q2FY18 to 13.1% in Q2FY19. Segment contributed 14.8% to the total revenue.
  • Sales from Copper Rods declined 27.9% yoy to Rs163.4cr during the September quarter. EBIT for the segment slumped from Rs5.7cr in Q2FY18 to Rs0.8cr in Q2FY19. Thus EBIT margin came at 0.5% vs. 2.5% in Q2FY18. Copper Rods business contributed 18.7% to the top-line of the company.
  • Cash and Cash Equivalent increased from Rs103.6cr on March 31, 2018 to Rs134.2cr at the close of September 30, 2018.

Technical View:

Finolex Cables Ltd share price ended the day at Rs514.25, down 5.85 points, or 1.12%, from its previous close of Rs520.10 on the BSE. The scrip opened at Rs529 and touched a high and low of Rs529 and Rs510.10, respectively. A total of 29,775 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200-DMA.

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