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Jefferies maintains ‘hold’ on Finolex Cables, lowers target price to Rs 400

The company is primarily into cables & wires but diversification benefits are yet to accrue to margins or earnings per share, said Jefferies.

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Last Updated: Dec 18, 2019, 08.32 AM IST
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Jefferies has maintained ‘hold’ rating on Finolex Cables in the long term and revised target price to Rs 400 from Rs 450. Shares of Finolex Cables ended up 3.8% at Rs 370.50 on Tuesday while BSE Sensex closed 413.45 points up at 41,352.17.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 715.76 crore, down -11.39% from last quarter sales of Rs 807.74 crore and up .25 % from last year same quarter sales of Rs 713.97 crore. The company has reported net profit after tax of Rs 97.02 crore in the latest quarter.

The company’s top management includes Mr.D K Chhabria, Mr.Devender Kumar Vasal, Mr.Jayaram Rajasekara Redd, Mr.Joel Raphael Samuel, Mr.Mahesh Viswanathan, Mr.Mohan Lal Jain, Mr.Pradeep R Rathi, Mr.Pratap G Pawar, Mr.Shishir Lall, Mr.Yatin Redkar, Ms.Shruti Deepen Udeshi. Company has Deloitte Haskins & Sells LLP as its auditors. As on 30-09-2019, the company has a total of 152,939,345 shares outstanding.

Investment Rationale

The company is primarily into cables & wires but diversification benefits are yet to accrue to margins or earnings per share, said Jefferies. Communication revenue largely depends on contracts and thus tends to be bulky in nature, said Jefferies. The brokerage believes that near term fiber capex cycle is largely behind.

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