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.
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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