Finolex Cables, one of the leading manufacturer of electrical and communication cables, recently announced that it had a better quarter performance between June and September 2019 compared to previous year, surviving business impact due to the slowdown across industrial segments.

Net Sales for the quarter ended September 30th 2019 were Rs 715.7 crore as against Rs 714.0 crore for the corresponding period of the previous year representing a flat growth in overall revenue.

Growth in net sales were affected by slowdown in automobile, industrial and communication sectors, with optic fibre cables being affected the most (a contraction of more than 25 per cent). Further commodity prices continued to fall in the quarter leading to lower realisations.

On volumes, electrical wires grew by a healthy 12 per cent, while the agricultural applications grew by more than 25 per cent. In the communication sector OFC volumes declined due to slowdown in government spending as evidenced by the financial difficulties currently being faced by BSNL/MTNL etc. It is expected that the recent announcement by the government to revive BSNL/MTNL will have a positive impact in the coming quarters. Nongovernmental spending in fibre assets by telecom companies has also seen a substantial dip in the recent months, with the major telcos having to financially restructure themselves. The subdued level of activity is expected to continue for a few quarters more.

New businesses growth was subdued, contributing Rs 16 crore as against Rs 18 crore in the previous year. Volume showed improvement, however higher spends on advertisement and market development activities, resulted in lower profitability. As volumes improve further, it is expected that profitability should improve as well.

Profit for the quarter, before taxes, was Rs 139.1 crore, as compared to Rs 132.9 crore in the previous year. The company has opted for following the recently announced lower tax rates and as a consequence profit for the quarter, after taxes, improved to Rs 123.1 crore against Rs 92.9 crore in the previous year.