Finolex Cables Limited: history, ownership, mission, how it works & makes money

A Brief History of Finolex Cables Limited

Finolex Cables Limited, founded in 1958, has established itself as a leading manufacturer of electrical and telecommunication cables in India. The company began as a small venture in Pune, Maharashtra, focusing on the production of PVC insulated wires.

In 1985, Finolex entered the market for communication cables, which fueled its growth trajectory. By the early 1990s, the company had expanded its portfolio to include a variety of cables, including low voltage, high voltage, and specialty cables. As of March 2023, Finolex Cables reported a total revenue of ₹ 3,581 crore for FY 2022-2023, reflecting a year-over-year growth of 10%.

The company went public in 1992, with its IPO being highly subscribed. Finolex Cables is listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) under the ticker symbol FINCABLES. The shares have shown resilience in the market, achieving a price of approximately ₹ 600 per share as of October 2023.

Finolex's investment in modern manufacturing processes has contributed to its strong financial performance. The company operates multiple production facilities, including a notable plant in Pune, which has a capacity of over 300,000 MT of cables annually. Recent quarters also saw the introduction of new products, especially in the domain of renewable energy solutions, aligning with India's increasing focus on sustainability.

As of the latest data in October 2023, Finolex Cables has reduced its debt-to-equity ratio to 0.09, indicating solid financial health and stability. The company’s strategic initiatives to enhance operational efficiency have resulted in an ROI of 15% in FY 2022-2023.

The company is also committed to corporate social responsibility, investing approximately 2% of its net profit in various community development projects, particularly in education and health sectors.

Over the years, Finolex Cables Limited has built a reputation for quality and reliability, which has translated into a significant market share in both electrical and communication cables. The ongoing expansion into new markets and product segments positions Finolex favorably in the competitive landscape of the cables industry.

A Who Owns Finolex Cables Limited

Finolex Cables Limited is a prominent player in the Indian cable industry, primarily known for manufacturing and selling electrical and telecommunication cables. The ownership structure of the company reveals a blend of institutional and individual shareholders.

As of the latest data, the major shareholders of Finolex Cables are listed below:

The promoter group holds a significant portion of shares, which includes the influential K. R. N. Murthy, who serves as the Managing Director. Their strong influence on strategic decisions is evident in the company’s operational direction and policies.

In terms of recent financial performance, Finolex Cables reported a revenue of ₹3,200 crores for the financial year ending March 2023. The net profit for the same period stood at ₹350 crores, showing a remarkable growth rate of 15% year-on-year. This consistent performance can often attract more institutional investments, influencing ownership structures over time.

The company is listed on the Bombay Stock Exchange (BSE) under the symbol "FCL," and its market capitalization as of October 2023 was approximately ₹7,000 crores.

Given these statistics, it is clear that the ownership of Finolex Cables Limited is characterized by a majority held by the promoter group, complemented by institutional backing, which plays a critical role in the firm’s governance and operational strategies.

Finolex Cables Limited Mission Statement

Finolex Cables Limited, a leading manufacturer of electrical and telecommunication cables in India, expresses its commitment through a carefully crafted mission statement. Their mission encapsulates a dedication to quality, innovation, and customer satisfaction, demonstrating a strong alignment with industry demands and consumer needs.

The mission statement emphasizes the objective to deliver high-quality products while adhering to best practices in manufacturing and sustainability. Finolex aims to leverage cutting-edge technology to enhance production processes, thereby improving efficiency and reducing costs.

As of the fiscal year 2022-2023, Finolex Cables reported a revenue of ₹2,392 crores, showcasing a growth of approximately 10% compared to the previous year. The company’s profit after tax (PAT) for the same period was approximately ₹294 crores, reflecting an increase of about 12% year-on-year.

In line with its mission, Finolex Cables has committed to sustainable practices, investing around ₹85 crores in renewable energy projects over the next five years. This initiative aims to reduce the company's carbon footprint and enhance its environmental stewardship.

To support its mission, Finolex Cables has established a comprehensive quality assurance framework that complies with international standards, ensuring product reliability and customer trust. In 2022, the company achieved a quality certification score of 96% during its annual audits.

Furthermore, Finolex Cables aims to expand its market presence, targeting a growth in market share from 9% to 12% by 2025. This strategic goal is driven by a robust product portfolio and a commitment to innovation, including the introduction of new cable technologies that meet the evolving needs of customers.

The dedication to customer satisfaction is further evidenced by a customer feedback score of 4.7 out of 5, reflecting the company's focus on service delivery and product excellence. Finolex continuously monitors market trends and customer preferences to ensure alignment with its mission objectives.

In summary, Finolex Cables Limited’s mission statement is a reflection of its ethos, focusing on quality, sustainability, and customer-centricity. The company is poised to remain a key player in the electrical and telecommunication cable industry, driving innovation while maintaining a strong commitment to its core values.

How Finolex Cables Limited Works

Finolex Cables Limited operates primarily in the manufacturing of electrical and communication cables. It is one of India's leading companies in this sector and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) under the ticker symbol 'FINCABLES'.

The company's product portfolio includes a wide range of cables such as:

• House Wires
• Power Cables
• Low Tension Cables
• Telecommunication Cables
• Specialty Cables

As of FY 2023, Finolex Cables reported a revenue of ₹2,467 crore, marking an increase of 19% compared to the previous year. The net profit stood at ₹220 crore, up by 14% year-over-year.

The company’s manufacturing facilities are based in Pune and the Dighi Port in Maharashtra, which allows for efficient logistics and distribution. The production capacity for various cable categories has expanded in recent years, with a focus on enhancing quality while reducing production costs through technological advancements.

Finolex Cables focuses on innovation as a key driver of its operations. The R&D department continuously works on developing new products that meet the changing needs of the market. In FY 2023, the company invested approximately ₹30 crore in R&D, an increase of 20% from the previous year.

In the context of market share, Finolex commands a significant portion of the electrical cables market in India, estimated at around 19%. The competitive landscape includes companies like Polycab India, Havells India, and KEI Industries.

Distribution is a critical component of Finolex's operations. The company has established a robust distribution network that spans over 3000 dealers across India. This network facilitates timely delivery and enhances customer satisfaction.

In terms of sustainability, Finolex has implemented several eco-friendly initiatives, including the use of recyclable materials in their cables. The company reports that approximately 25% of their raw materials are sourced from renewable sources.

The company's stock performance has shown resilience. As of October 2023, the stock price was around ₹660, reflecting a year-to-date increase of 12%.

Overall, Finolex Cables Limited operates with a comprehensive approach that encompasses innovation, sustainability, and an expansive distribution network, making it a formidable player in the cables industry in India.

How Finolex Cables Limited Makes Money

Finolex Cables Limited operates primarily in the manufacturing of electrical and telecommunication cables, which is a significant revenue driver. The company produces various types of cables, including low tension (LT) and high tension (HT) cables, as well as fiber optic cables. In the fiscal year 2022-2023, Finolex Cables reported a revenue of ₹3,147 crore, showing a growth of approximately 20% compared to the previous year.

The company’s product range is categorized into several segments that contribute to its earnings:

• Electrical Cables
• Telecommunication Cables
• Wires
• Power and Control Cables
• Packaging and Accessories

As noted in its annual report, electrical cables account for around 70% of the total revenue. The demand has been buoyed by the real estate and infrastructure sectors, with significant government initiatives promoting electrification and housing projects. For instance, the Indian government's push for "Housing for All" led to increased sales in this segment.

Telecommunication cables, which make up about 15% of the revenue, have also seen strong growth. With the expanding digital infrastructure in India, demand for fiber optic cables has surged, contributing significantly to the company’s bottom line. In FY 2022-2023, this segment's revenue increased by 25% year-over-year.

In terms of operational performance, Finolex Cables reported an EBITDA margin of 12.5% in FY 2022-2023, demonstrating robust cost management practices. The net profit for the same period stood at ₹335 crore, compared to ₹277 crore in FY 2021-2022, reflecting a growth of 21%.

Finolex Cables also benefits from its extensive distribution network, which spans across India. This expansive reach allows the company to effectively tap into the growing demand in both urban and rural markets. The company's capital expenditure plans indicate a focus on expanding production capacity, which is projected to further enhance revenue streams in the coming years.

Moreover, the adoption of sustainable practices has positioned the company favorably in the market. By incorporating eco-friendly materials in its production processes, the company is aligning itself with global trends towards sustainability, which can enhance its competitive edge and attract environmentally-conscious consumers.