Finolex Cables Limited, a stalwart in the electrical and telecommunication cables industry in India for over five decades, continues to uphold its reputation as one of the nation’s most diversified wires and cables manufacturers. In this article, we delve into the recent noteworthy developments surrounding Finolex Cable shares, exploring the significance of the Exponential Moving Average (EMA) crossover on the daily timeframe and shedding light on the company’s stellar second-quarter performance in the fiscal year 2023-24. Additionally, we’ll discuss Finolex’s strategic expansion plans, providing investors with a comprehensive overview of why this might be an opportune moment for potential buyers.
EMA Crossover Signals Potential Upside
Examining the daily price chart of Finolex Cable shares, a significant EMA crossover event has caught the attention of investors.
In February 2023, the stock was priced at around 548 rupees per share, and by October of the same year, it soared to an impressive 1100 rupees per share, marking a remarkable 100 percent gain in less than a year. Following a period of profit booking and short consolidation, the stock is once again on an upward trajectory. Notably, the 8-day EMA is crossing above the 20-day EMA, signaling a potential bullish trend, indicating that the stock may be poised for further gains.
Stellar Q2 FY23-24 Results
The second quarter results of the fiscal year 2023-24 have been nothing short of stellar for Finolex Cables. The company reported a staggering 178.45 percent growth in its net consolidated profit, reaching Rs. 154.18 crore in Q2 FY24, compared to Rs. 55.37 crore in the corresponding quarter of the previous fiscal year. The net consolidated total income also saw a robust growth of 10.9 percent, standing at Rs. 1,229.27 crore. The board’s decision to recommend a dividend of Rs. 7 per equity share, approved by shareholders, further adds to the attractiveness of Finolex as an investment option.
Expansion Plans Fueling Optimism
In line with its commitment to growth, Finolex Cables has outlined ambitious expansion plans for the fiscal year 2023. The company has earmarked a substantial capex of Rs. 500 crores over the next 18-20 months to augment its plant capacities across all product categories. Moreover, strategic investments in backward integration, including the manufacture of optical fiber preforms and expanding fiber draw capacity, demonstrate Finolex’s foresight in adapting to industry demands. With plans to increase auto cable capacity by 50% and establish an e-beam facility, Finolex aims to position itself as an industry leader with commercialization expected in H2 FY25.
Finolex Cables Limited, propelled by pivotal success factors, is charting an impressive course of expansion, presenting an enticing investment prospect. However, it is strongly advised that astute investors engage in comprehensive research and align their investment decisions with their unique financial goals to guarantee well-informed and prudent choices.
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