1. ECONOMIC AND INDUSTRY OVERVIEW
Global Economy
The global economy in CY 2024 demonstrated notable resilience in the face of persistent mutual shocks. However, growth remained subdued relative to pre-pandemic levels, constrained by weak investment, sluggish productivity, and elevated debt burdens. The International Monetary Fund (IMF) estimates global growth at 3.3% for CY 2024, holding steady from CY 2023, with a projected moderation to 2.8% in CY 2025 before a mild recovery to 3.0% in CY 2026.
A key trend was the divergence between sectors; global manufacturing slowed due to supply chain disruptions and weak external demand, particularly in Europe and
Asia, while the services sector outperformed in many economies. Although global inflationary pressures are easing, they remain persistent in several countries driven by energy, food prices, and fiscal instability. Global headline inflation is estimated at 5.9% in CY
2024, with a projected decline to 4.5% in CY 2025.
Looking ahead, key risks include policy uncertainty, adverse trade policies, geopolitical tensions, and climate events. Conversely, faster disinflation and stronger demand in key economies present upside potential.
Source: https://www.imf.org/en/Publications/WEO/
Issues/2025/01/17/world-economic-outlook-updatejan uary-2025#Overview.
Indian Economy
India continues to be a standout performer, solidifying its position as the worlds fastest-growing major economy. Driven by continued reforms, thriving domestic demand, steady investment, and strategic government initiatives under the vision of AatmaNirbhar
Bharat, India has climbed to become the worlds 4 th largest economy. The National Statistics Office (NSO) estimates Indias growth at 6.5% in FY 2024-25.
Strong fundamentals are evident: declining unemployment (from 6% to 3.2%) has boosted disposable incomes and household consumption, while headline inflation moderated to 4.6% from 5.4% in the previous year. India is on track to become the third-largest economy by 2030, with a projected GDP of US$ 7.3 trillion, underscoring its critical role in global economic stability.
Industry Review: Wires & Cables
The global wires and cables market was estimated at US$ 202.0 billion in FY 2024, projected to grow at a
CAGR of 4.5%. The Asia-Pacific region, led by China and
India, dominates this market.
Indias wires and cables market is a significant growth story, valued at 920 billion in FY 2024-25 and accounting for approximately 5% of the global market. The industry is projected to expand at a robust
CAGR of 11.8% to reach 1,430 billion by FY 2028-29.
This growth is fuelled by:
?? Government Initiatives: Massive investments in infrastructure, smart cities, renewable energy, and power transmission & distribution (T&D).
?? Rapid Urbanisation: Booming real estate and construction sectors.
?? Renewable Energy Push: Significant specialised cables for solar and wind projects.
?? Formalization: The Organised sector (72% of the market) is gaining share from the Unorganised sector, expected to move from a 70:30 to an 80:20 ratio by FY 2026-27.
?? Source: https://www.pib.gov.in/PressNoteDetails. aspx?NoteId=154660#:~:text=India%20is%20 the%20worlds%20fastest,%25%20in%20 2025%2D26).
2. COMPANY OVERVIEW
Finolex Cables Limited ("Finolex" or "the Company"), established in 1958, is one of Indias largest and leading manufacturer of electrical and communication cables. With a heritage of nearly seven decades, the Company is renowned for its reliability, innovation, and quality.
The Companys strengths are multi-faceted:
?? Diversified Portfolio: Multiple SKUs across electrical cables, communication cables, and a growing Fast-Moving Electrical Goods (FMEG) segment.
?? Robust Manufacturing: Five state-of-the-art,
ISO-certified plants across Pimpri, Urse, Goa, and
Roorkee, with backward integration into key raw materials like Continuous Cast Copper (CCC) rods.
PVC Insulation Compounds, Optical Fibre and very soon glass preforms.
?? Extensive Distribution: A powerful pan-India network comprising over 600 distributors, 5,000 channel partners, and 2,15,000 retailers.
?? Strategic Vision: Expansion into FMEG (fans, switches, lighting, water heaters, smart home devices) positions Finolex as a comprehensive
" Total Electrical Solutions" provider.
3. FINANCIAL PERFORMANCE REVIEW
(STANDALONE)
The Company delivered a steady financial performance in a year marked by commodity price volatility and competitive intensity.
?? Revenue: Revenue from Operations grew by 6% to 5,318.9 crores (from 5,014.3 crores in FY 2023-24).
?? Profitability: Profit Before Tax (PBT) stood at 713.6 crores and Profit After Tax (PAT) was
544.4 crores.
?? Margins: PAT margins were maintained at a healthy level. Margins were impacted by high input costs and a competitive pricing environment, which were partially offset by operational efficiencies.
?? Strong Balance Sheet: The Company remains debt-free with a strong liquidity position and a high credit rating of CRISIL AA+/Stable for long-term debt.
4. SEGMENT-WISE PERFORMANCE & OUTLOOK
A. Electrical Cables
?? Performance: The segment, contributing 84% of total revenue, recorded a 6.6% growth to
4,499.0 crores. Volumes remained stable despite market challenges. The EBIT margin for the segment was 11%.
?? Key Developments: Commissioned a new e-Beam technology facility and launched two new products: Solar Cables and Premium Wires for construction, which were well-received.
?? Outlook: Growth will be driven by massive government capex in infrastructure ( 11.21 lakh crore in Union Budget 2025-26), railway electrification, renewable energy projects, and housing schemes (PMAY-U, Smart Cities). The Company is well-positioned to capitalize on these opportunities.
B. Communication Cables
?? Performance: Revenue saw a slight decrease of 4.4% to 507.7 crores, primarily due to price erosion in Optical Fiber Cables (OFC), despite a strong 30% volume growth in OFC.
?? Outlook: The long-term outlook remains positive, driven by the 5G rollout, increasing data consumption, data centre expansion, and government focus on digital infrastructure. The upcoming commercialisation of the preform facility will be a key future growth driver.
C. Copper Rods
?? Performance: Revenue increased significantly to
56.1 crores (from 36.4 crores). The segment navigated extreme copper price volatility through strategic pricing and partner contracts.
?? Outlook: Demand is intrinsically linked to the growth of the electrical and communication cables segments, which is expected to remain strong.
D. Other Products (FMEG & Home Appliances)
?? Performance: This segment showed promising growth of 13.7% to 256.1 crores, led by expansion in the product portfolio and distribution network. o Electrical Switches, Switchgears & Lighting: Revenue grew to 82.9 crores. o Fans & Water Heaters: Revenue grew to 36.5 crores.
?? Outlook: The FMEG sector is projected to grow at a ~10% CAGR, supported by rising disposable incomes, rural electrification, and brand formalization. Finolex aims to achieve 500 crores in revenue from this segment in the next
2-3 years through organic growth and potential inorganic opportunities.
5. STRATEGIC INITIATIVES & CAPACITY
EXPANSION
The Company is executing a focussed growth strategy:
?? Capacity Expansion: A capex of nearly 500 crores was lined up for the period FY 2024-26.
Key projects include: o Commissioning of the new e-Beam facility has been completed and equipment commissioned o Development of new products like EV battery cables and instrumentation cables for railways o Commissioning of a optical fiber preform facility o Expansion of Optic Fiber capacity o Expansions of auto cable production capacity
?? Market Expansion: Aiming to extend retail reach to 2,50,000 retailers, focussing on Tier 2 & 3 cities, and strengthening partnerships with real estate developers.
6. RISK MANAGEMENT
The Company has a robust risk management framework overseen by a dedicated committee. Key risks and mitigants include:
?? Competition Risk: Mitigated through strong brand equity, product differentiation, technical expertise, and backward integration.
?? Raw Material Price Volatility: Managed through strategic pass-through mechanisms, hedging, optimal inventory management, and backward integration.
?? Policy & Regulatory Changes: Diversified base across sectors reduces dependence on any single policy shift.
?? Currency Risk: Hedging strategies and long-term contracts with international partners are employed to minimize forex exposure.
7. OUTLOOK
The outlook for Finolex Cables is optimistic. The Indian economy is expected to remain on a high-growth private trajectory, fuelled by significant investments in infrastructure, energy, and digitalisation. The wires and cables industry, in which the Company is a leader, is poised for double-digit growth.
The Company is strategically aligned to harness these opportunities through its diversified portfolio, extensive distribution network, strong brand reputation, and on-going capacity expansion.
While remaining vigilant about global macroeconomic headwinds and commodity price fluctuations, the Management is confident in its strategy and is committed to delivering sustainable growth and long-term value to its shareholders.
Cautionary Statement
The Management Discussion and Analysis may contain some statements describing expected future events, the Companys objectives, projections, estimates, and financial and operating results which may be forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those either client expressed or implied in the forward-looking statements depending on various risks and uncertainties.
Readers are advised to exercise caution and refrain from placing undue reliance on forward-looking statements. Therefore, this document is subject to the disclaimer and is qualified in its entirety by the assumptions, qualifications, and risk factors outlined in the managements discussion and analysis of Finolex Cables Limiteds Annual Report 2024-25. The Company undertakes no responsibility to publicly amend, modify or revise any forward-looking statements, whether as a result of any subsequent developments, new information, future events, or otherwise.
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