FINCABLES - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Analysis: Finolex Cables Ltd. (FINCABLES)

Investment Rating: 4.1

📈 Long-Term Investment Potential

Finolex Cables presents itself as a financially resilient mid-cap with competitive fundamentals and compelling long-term potential—especially for value-driven investors looking beyond short-term market noise.

✅ What Works

Zero Debt (D/E: 0.00): Impressive balance sheet strength and operational flexibility.

Strong ROCE (17.6%) & ROE (13.4%): Signify efficient use of capital and robust profitability.

Reasonable Valuation: P/E of 19.8 versus Industry PE of 30.3 — undervalued in relative terms.

Stable EPS of ₹45.8: Reflects consistent per-share earnings power.

Qtr PAT Growth (₹192 Cr. vs ₹147 Cr.): Positive earnings momentum.

Healthy Book Value of ₹359: Implies potential intrinsic value cushion.

⚠️ Points of Caution

Negative DII Shift (-0.50%): Slight drop in domestic institutional sentiment.

MACD Negative (-14.3) & RSI at 38.6: Indicates weak momentum and potential oversold zone.

PEG Ratio of 3.71: Suggests high price compared to expected earnings growth.

Trading Well Below 52W High: Currently at 21.2% of its yearly range, implying missed sentiment.

🎯 Ideal Entry Price Zone

₹880–₹920 Range

Near current market price and DMA50 support.

RSI under 40 and falling MACD point to a possible rebound opportunity.

Consider phased entry with close attention to momentum reversal signs.

🧭 Strategy for Existing Holders

⏳ Recommended Holding Period

2–3 Years Minimum

Allows upside capture from future capex cycles and margin normalization.

🚪 Exit Strategy

Target ₹1,450–₹1,550: Near resistance and prior peak levels.

Consider trimming if

ROCE dips below 15%

Institutional interest continues declining

PEG ratio remains elevated without matching earnings growth

Set a trailing stop-loss near ₹850 to protect downside.

🧠 Final Thought

Finolex Cables stands out for its strong core metrics, clean balance sheet, and undervaluation relative to peers. While short-term technicals suggest weakness, patient accumulation could pay off handsomely. It's a quiet compounder waiting for sector tailwinds — just keep an eye on volumes and institutional moves.

Want to size this up against Polycab or KEI for a peer-to-peer health check?

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