Finolex Cables (FCL) reported a 12% year-on-year decline in net profit to Rs 146.1 crore for the September quarter. Revenues for the quarter grew 10% to Rs 1311.7 crore.
A steep fall in copper prices from mid-May 2024 resulted in destocking by customers, which continued till August. Consequently, the selling price had to be adjusted downwards, impacting the margin, the company said. The company had high-cost inventory left over from the previous quarter.
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This impacted business sentiments and consequently sale of electrical wires, the company said. Selling price corrections were taken at multiple points during the quarter, impacting margins negatively.
In volume terms, electrical wires grew by 2% while metal-based products in the communication cables segment volumes were lower by 9%. The optic fiber cable volumes grew by 53% during the quarter. Network expansion drove the growth in the sale of flexible cables and power cables segment. Volume growth was driven by new product categories and reflected in the overall turnover from this segment.
Volumes in the lighting segment grew, but price deflation continued to erode gains in volumes, the company said. In the fans and small domestic appliances, the launch of economy models had led to an increase in sales.
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The company said expansion plans were on track with the E-Beam facility ready for operation and was waiting for regulatory approvals. Market offerings from this facility are expected to be launched in Q3FY25. The preform facility was at an advanced stage of completion and expected to be commissioned towards the latter part of this fiscal and the plant is expected to be operational by January or February ’25.
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