Metrics raised 1
- Fiber draw tower capacity expansion accelerated from phased 4→6→8 million km approach to direct 4→8 million km, expected complete by end of Q2 FY27 (prior phased plan with no specified timeline).
Event Participants
Executives
2 Mahesh Viswanathan (CEO), Sachin Naik (CFO)
Analysts
10 Achal Lohade (Nuvama Wealth), Balasubramanian A (Arihant Capital Markets), Pathanjali Srinivasan (Sundaram Asset Management), Raman Kerti (Sequent Invest), Sonali Salgaonkar (Jefferies), Tej Patel (Niveshaay Investment Advisors), Tushar Dhonde (Shanghvi Family Office), Veenit Pasad (Investec India), Vidit Trivedi (Asian Markets Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹2,013 crores | +44% YoY (vs ₹1,396 crores); strong growth across electrical & communication cables |
| Profit Before Tax (PBT) | ₹277 crores | +62% YoY (vs ₹171 crores); PBT margin expanded to 13.4% (vs 11.8% YoY) |
| Profit After Tax (PAT) | ₹221 crores | +59% YoY (vs ₹139 crores); PAT margin improved to 10.7% (vs 9.6% YoY) |
| Electrical Cables Revenue | ₹1,767 crores | +47% YoY (vs ₹1,206 crores); auto, solar, agricultural cables drove high double-digit volume growth |
| Communication Cables Revenue | ₹176 crores | +62% YoY (vs ₹109 crores); segment margin ~30%, elevated due to older low-cost raw material inventory |
| Copper Rods Revenue | ₹8 crores | Sharp decline (vs ₹403 crores) due to LPG availability restrictions causing plant shutdown |
| Exports | ~₹50 crores | Almost entire FY26 export value achieved in Q1; fiber/power cable exports to US & Europe |
| JV Performance | Revenue ₹87 crores, Profit ₹7 crores | Continued strong performance trend (FY26: ₹24 crores profit) |
Geographic & Segment Commentary
Electrical Cables: Largest segment (₹1,767 crores, +47% YoY) with high double-digit volume-led growth in automotive cables, battery cables, flexible wires, solar and agricultural applications. Building wires saw low single-digit volume growth due to channel destocking, with end-quarter channel inventory at low levels. Product mix approximately 60% construction (wires), with auto, agriculture and industrial each around 10-12%, solar smaller, and LV/HV cables ~7-8%.
Communication Cables: Revenue grew 62% YoY to ₹176 crores with margins near 30%, driven by hardening fiber prices (G.652.D fiber from $5-6/km in Dec'25 to $17-18/km, settling at $12-13/km). Exports contributed 35-40% of segment revenue, primarily to US and Europe (~₹30-40 crores). Margins are elevated due to consumption of low-cost opening raw material inventory; management cautions normalization to low double-digits once inventory is consumed.
Copper Rods: Revenue collapsed to ₹8 crores (vs ₹403 crores YoY) due to continued LPG availability restrictions, forcing plant shutdown during the quarter. No clear timeline mentioned for resolution.
Company-Specific & Strategic Commentary
Fiber Capacity Expansion: Draw tower capacity expansion accelerated from phased approach (4→6→8 million km) to direct 4→8 million km, expected complete by end of Q2 FY27. Cabling capacity at 8 million km, expanding to 10 million km. Preform production commenced (100 metric ton capacity = ~4 million km fiber) and is in stabilization phase, expected to reach stability in next couple of months.
Data Center & AI Opportunity: Global demand explosion from data centers and AI applications driving fiber demand. India consumption at ~25 million km/year vs China at 400+ million km/year, showing long runway. Hyperscaler investments ($5-6 billion+ each) in India expected to sustain demand for 2+ years. High-fiber-count cables (thousands of fibers per cable) for data centers being developed; management confident of capability in "not too distant future."
Exports Revamp: New export-focused team established with systematic approach to building long-term relationships across geographies. Exported power cables, optic fiber cables, and traditional products (submersible cables) over last 4-5 months beyond the Q1 fiber export spike.
FMEG Segment: Q1 impacted by commercial LPG unavailability (fans) and PVC supply/price issues (conduit pipes) - supply chain issues, not demand-related. Management reaffirmed confidence in achieving ₹5 billion FMEG revenue target by FY28.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Draw Tower Capacity | 8 million km by end of Q2 FY27 (September) | Accelerated from phased plan; demand robust due to global fiber shortage |
| Communication Cable Margins | Normalize to low double-digits from current ~30% | Elevation due to old inventory consumption; new raw material at higher cost; repricing of contracts already done in June |
| Annual Capex (FY27) | ~₹300 crores | Includes accelerated draw tower expansion; additional preform capacity under study |
| Fiber Revenue Potential | ~$88 million (only fiber) at full draw capacity, +25-30% value-add if cabled | Based on $11/km average price and 8 million km capacity |
| FMEG Revenue | ₹500 crores by FY28 | Target reiterated despite Q1 supply chain disruptions |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Price Volatility | Fiber prices have surged 3x from Dec'25 lows; management unable to predict future trajectory. Input costs (helium ₹1,600→₹5,000→₹3,400-3,500/cubic meter) fluctuating due to Middle East instability. Margins could compress if prices normalize as inventory gets consumed. |
| Germanium Tetrachloride Availability | Restricted item with long lead times for preform manufacturing. Management has enough for calendar year but requires "daily follow-up"; hand-to-mouth situation for all domestic players. |
| Supply Chain Disruptions | Commercial LPG unavailability shut copper rod plant; PVC supply issues impacted FMEG segment. Season loss (fans) cannot be recovered even as supply normalizes. |
| Export Sustainability | Q1 exports ₹50 crores included one-off premium fiber opportunities. Management is "conservative" on recurring export margins; new opportunities being developed but timing uncertain. |
| Competitive Margin Normalization | 30% communication margins are exceptional and unsustainable; normalizing to low double-digits will impact profitability as high-cost inventory gets consumed. |
| High Copper Prices | Copper at $14,000+ levels (commented "not sure you will see $8,000 again"); could dampen demand and affect channel restocking. |
Q&A Highlights
Margins & Sustainability
- Question: How should we think about sustainable margins? What portion of Q1 expansion is one-off? (Vidit Trivedi, Asian Markets Securities)
- Answer: Domestic electrical cable margins ~10.5% are sustainable. Communication cable margins elevated at 30% due to consumption of low-cost opening inventory (sourced Nov-Dec at lower fiber prices) - will normalize to low double-digits as inventory depletes and new higher-cost material comes in. (Mahesh Viswanathan)
Fiber Prices & Raw Material
- Question: What are current fiber prices vs Dec'25 and outlook? (Sonali Salgaonkar, Jefferies)
- Answer: G.652.D fiber was $5-6/km in Dec'25, peaked at $17-18/km, now settling at $12-13/km. Premium fibers sold at $50/km. Can't predict direction but prices should stay in range while demand remains strong. Management unable to forecast price direction due to fluidity. (Mahesh Viswanathan)
Preform Integration & Margin Impact
- Question: How much margin improvement from preform backward integration? (Sonali Salgaonkar, Jefferies)
- Answer: 100 metric ton preform facility (equivalent to 4 million km) will be 100% captive for in-house fiber drawing. Management declined to quantify specific margin improvement, citing volatile input costs (helium, fuel, etc.). Normalized margin improvement possible but not "100 bps over current levels given peak cycle prices." Phase 2 preform expansion under consideration. (Mahesh Viswanathan)
Communication Segment Capacity & Revenue
- Question: What is potential revenue at peak capacity? (Achal Lohade, Nuvama Wealth)
- Answer: At 8 million km draw capacity, $88 million annual revenue if only selling fiber at $11/km average. Value-add of 25-30% on top if selling cable. Cabling capacity at 8 million, expanding to 10 million. Current 4 million fiber capacity fully utilized - "used up all preforms." (Mahesh Viswanathan)
Demand Outlook - Data Centers
- Question: How should we think about next 1-2 years data center demand? (Veenit Pasad, Investec India)
- Answer: Telecom (5G rollout) and domestic hyperscaler data centers driving demand. India fiber consumption ~25 million km/year vs China's 400+ million - significant headroom. Peter India consumption could reach 50-60 million km. Near-term demand from Microsoft data center in Pune (completing soon) and other hyperscaler investments of $5-6 billion+. Demand robust for at least 2 years. (Mahesh Viswanathan)
Germanium Availability
- Question: Any issues with germanium tetrachloride supply for preform? (Raman Kerti, Sequent Invest)
- Answer: Germanium tetrachloride is restricted item with long lead times; requires daily follow-up. Current stock sufficient through calendar year with more on the way. Industry-wide issue affecting both domestic preform manufacturers. Contracts are typically annual, no multi-year agreements in this industry. (Mahesh Viswanathan)
FMEG Performance & FY28 Target
- Question: Is ₹5 billion FMEG target realistic? What's holding back the business? (Vidit Trivedi, Asian Markets Securities)
- Answer: Q1 impacted by commercial LPG unavailability (fans - hot summer demand couldn't be met) and PVC supply/price issues (conduit pipes). Supply has normalized but fan season is over. FY28 target stands; company confident of achieving it. (Mahesh Viswanathan)
Export Strategy & Sustainability
- Question: Were exports one-off or systematic? How to build sustainable export visibility? (Tushar Dhonde, Shanghvi Family Office)
- Answer: Revamped export-focused team working on multiple geographies systematically. Q1 US/EU opportunities were immediate opportunities, but long-term relationships being built. Not just one-off trade - exports of power cables, optic fiber cables, submersible cables expanding beyond traditional products. (Mahesh Viswanathan)
Key Takeaway
Finolex Cables delivered a strong Q1 FY27 with revenue growth of 44% YoY (₹2,013 crores) and PAT growth of 59% YoY (₹221 crores), driven by high double-digit volume growth in automotive, solar, and agricultural cables, and exceptional communication cable performance (₹176 crores, +62% YoY, ~30% margins). The communication segment benefitted from global fiber price surge (G.652.D at $12-13/km vs $5-6 in Dec'25) and consumption of low-cost inventory, with exports contributing 35-40% of segment revenue to US/Europe. Management accelerated fiber draw tower expansion to 8 million km (complete by end Q2 FY27), with preform facility (100 MT, 4 million km equivalent) stabilizing, positioning the company for the AI/data center demand wave in India. Copper rod plant remained shut due to LPG restrictions, impacting that segment. FMEG growth was constrained by supply chain issues (LPG for fans, PVC for pipes). Outlook remains positive but management cautions on margin normalization in communication cables to low double-digits, input cost volatility (helium, germanium), and fiber price sustainability. Key watch points include preform stabilization, data center orders materializing, channel restocking (inventory at low levels), and potential preform Phase 2 investment decision.