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For the quarter ended Sep’06 Finolex Cables has reported a revenue growth of 64% to Rs 276.1 crore. The operating profit margin has improved by 650 basis points to 14.3%. Improvement in margins coupled with surge in revenue has led to a 202% jump in operating profit to Rs 39.57 crore. The net profit of the company has reported growth of 318% to Rs 21.5 crore. The growth in bottomline of the company was mainly powered by electrical cables and copper rods division.
Quarterly Results
Net sales for the quarter has increased by 64% to Rs 276.1. As percentage of sales (net of stock adjustment) cost of raw materials consumed, staff cost and other expenses have declined to 78.6%, 2.73% and 6.18% respectively. (Last year: 79.24%, 4.15% and 9.74%). Thus operating profit margin has improved by 650 basis points to 14.3%. Improvement in margins coupled with surge in revenue has led to a 202% jump in operating profit to Rs 39.57 crore.
Fall in other income by 77% to Rs 0.96 crore has restricted PBIDT growth to 136%. Interest expenses have increased by 46% to Rs 3.83 crore while provision depreciation has declined by 7% to Rs 6.47 crore. Thus, PBT has posted a growth of 296% to Rs 30.23 crore. Provision for tax has shoot up by 249% to Rs 8.73 crore. Finally, PAT of the company has posted a growth of 318% to Rs 21.5 crore.
Commenting on the performance of the Company, Mr Deepak Chhabria, Managing Director said, "Our quarterly performance has been remarkable and is in line with our expectations. The products newly introduced and the projects on hand will help us consolidate and enhance our leadership position in the market."
Half-Year Results
For the half-year ended Sep’06 net sales of the company has increased by 57% to Rs 487.84 crore. As percentage of sales (net of stock adjustment) cost of raw materials consumed has increased to 78.91% from 76.79% in corresponding quarter in previous year. However as percentage of sales staff cost and other expenses have declined to 2.98% and 7.25% respectively. (Last year: 4.56% and 11.48%). Thus operating profit margin has improved by 530 to 13.1%. Improvement in margins coupled with surge in revenue has led to a 164% jump in operating profit to Rs 63.81 crore.
Fall in other income by 20% to Rs 14.51 crore has restricted PBIDT growth to 85%. Interest expenses have increased by 34% to Rs 7.17 crore while provision depreciation has declined by 8% to Rs 12.85 crore. PBT has posted a growth of 152% to Rs 58.3 crore. Provision for tax has shoot up by 212% to Rs 14.24 crore. Finally, PAT of the company has posted a growth of 137% to Rs 44.06 crore.
Segment Results
Quarterly Results
a) Electrical Cables
The electrical cables business showed a growth in revenue of 61% to Rs 191.5 crore. PBIT margins for the segment have improved to 17.75% from 12 %. As a result the PBIT of the division has zoomed by 138% to Rs 33.99 crore.
b) Communication Cables
The Communication Cables business showed a growth in revenue of 40% to Rs 44.13 crore. The segment has reported a profit of Rs 0.38 crore as compared to loss of Rs 3.91 crore in corresponding quarter in previous year.
c) Copper rods
The Copper rods business showed a growth in revenue of 85% to Rs 158.96 crore. PBIT margins for the segment have improved to 2.04% from 0.84%. The PBIT of the division has reported a growth of 351% to Rs 3.25 crore.
Half-Year Results
a) Electrical Cables
For the half-year ended Sep‘06 the electrical cables business showed a growth in revenue of 56% to Rs 348.92 crore. PBIT margins for the segment have improved to 18.02% from 12.31%. As a result the PBIT of the division has zoomed by 129% to Rs 62.89 crore.
b) Communication Cables
The Communication Cables business showed a growth in revenue of 41% to Rs 73.29 crore. The segment has reported a profit of Rs 0.19 crore as compared to loss of Rs 7.19 crore in corresponding quarter in previous year.
c) Copper rods
The Copper rods business showed a growth in revenue of 111% to Rs 327.77 crore. PBIT margins for the segment have improved to 1.44% from 0.92%. The PBIT of the division has reported a growth of 229% to Rs 4.71 crore.
Other Developments
The company has introduced ‘premium range’ of Modular Electrical Switches to complement the ‘classic range’ already in the market. The electrical switches have been branded ‘Finoswitch’. They have been well received by the market. Also, during August 2006, the company has launched Compact Fluorescent Lamps (CFLs) in different ranges. The CFLs are called ‘Finoglow’. The market response has been positive. The company has an established distribution network across India for its electrical cables and the same is being leveraged to market these two new products.
The two projects on hand namely High Voltage Power Cable Project undertaken by the company at Urse near Pune and expansion of LDC capacity undertaken near Rurkee in the Uttarakhand State (Uttaranchal State) are progressing as per the schedule.
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