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Finolex Cables is poised for strong growth over the next few years, owing to entry
in the verticals of high tension (HT) and extra high voltage (EHV) cables and market
share expansion in the existing low tension (LT) cables segment.
The rapid ramp-up of production at the Roorkee plant has already started delivering
results. The proximity to the growing North Indian markets and tax benefits from
this plant are expected to boost the turnaround of the company. We expect the
company’s profits to increase to `151cr in FY2013E from `87cr in FY2011.
The company's derivative losses are expected to decline further going ahead. Finolex
Cables has registered substantial derivative losses over FY2009-11. However, the
worst is behind in this regard and losses are expected to taper going ahead.
By FY2013, these losses are estimated to decline to `13cr from ` 34cr in FY2011.
At the CMP, the stock is trading at attractive valuations of 4.1x FY2013E EPS and
0.7x FY2013E BV. We have valued the stock at P/E of 6.0x FY2013E EPS and
arrived at a target price of `59. We have a Buy rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Finolex Cables is poised for strong growth over the next few years, owing to entry
in the verticals of high tension (HT) and extra high voltage (EHV) cables and market
share expansion in the existing low tension (LT) cables segment.
The rapid ramp-up of production at the Roorkee plant has already started delivering
results. The proximity to the growing North Indian markets and tax benefits from
this plant are expected to boost the turnaround of the company. We expect the
company’s profits to increase to `151cr in FY2013E from `87cr in FY2011.
The company's derivative losses are expected to decline further going ahead. Finolex
Cables has registered substantial derivative losses over FY2009-11. However, the
worst is behind in this regard and losses are expected to taper going ahead.
By FY2013, these losses are estimated to decline to `13cr from ` 34cr in FY2011.
At the CMP, the stock is trading at attractive valuations of 4.1x FY2013E EPS and
0.7x FY2013E BV. We have valued the stock at P/E of 6.0x FY2013E EPS and
arrived at a target price of `59. We have a Buy rating on the stock.
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