FINCABLES - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 4.2

📊 Financials Overview:

• Revenue & Profit Growth: PAT increased from 139 Cr. to 187 Cr. (↑ 27.9%), showing strong quarterly momentum.
• Margins: ROCE at 16.2% and ROE at 12.4% indicate healthy profitability.
• Debt Ratios: Debt-to-equity at 0.00 reflects a debt-free balance sheet, enhancing financial stability.
• Cash Flows: Dividend yield at 1.04% provides moderate shareholder returns.

💹 Valuation Indicators:

• P/E Ratio: 20.0 vs Industry PE of 20.0 → fairly valued relative to peers.
• P/B Ratio: Current Price / Book Value ≈ 2.5, reasonable compared to sector norms.
• PEG Ratio: 1.91 → valuation moderately stretched relative to growth.
• Intrinsic Value: Fair value estimated near 740–760 ₹; current price (786 ₹) slightly above comfort zone.

🏭 Business Model & Competitive Advantage:

• Finolex Cables operates in electrical and communication cables, serving both industrial and consumer markets.
• Strong brand recognition and diversified product portfolio provide resilience.
• Debt-free operations allow flexibility for expansion and R&D investments.

📈 Entry Zone & Long-Term Guidance:

• Entry Zone: Attractive accumulation range between 740–760 ₹.
• Long-Term Holding: Strong fundamentals and fair valuation make it suitable for long-term investors.

Positive

• Debt-free balance sheet enhances financial stability.
• Strong PAT growth of 27.9% quarter-on-quarter.
• Dividend yield of 1.04% adds income appeal.
• DII holdings increased by 0.31%, reflecting domestic institutional confidence.

Limitation

• PEG ratio of 1.91 suggests valuation premium relative to growth.
• FII holdings declined by -0.77%, showing reduced foreign investor confidence.
• Stock trades below DMA 200 (877 ₹), indicating technical weakness.

Company Negative News

• No major negative news reported; valuation premium and FII outflow remain concerns.

Company Positive News

• Quarterly PAT growth of 27.9% highlights operational strength.
• DII holdings increased, showing domestic investor confidence.

Industry

• Industry PE at 20.0, aligned with Finolex’s valuation.
• Sector growth driven by infrastructure expansion, housing demand, and telecom investments.

Conclusion

⚖️ Finolex Cables demonstrates strong fundamentals with debt-free operations, healthy profitability, and fair valuation relative to peers. While FII outflows and PEG ratio suggest caution, the company remains attractive for long-term investors. Accumulation is recommended near 740–760 ₹ for margin of safety, while current levels are slightly above fair value.