On a consolidated basis, Finolex Cables reported 10.13% jump in net profit to Rs 102.72 crore in Q3 December 2019 (Q3 FY20) from Rs 93.27 crore reported the same period last year (Q3 FY19).
Profit before tax in Q3 FY20 stood at Rs 135.83 crore, up by 2.64% from Rs 132.33 crore reported in Q3 FY19. Current tax expenses in the December quarter fell sharply by 44.02% year-on-year (YoY) to Rs 24.93 crore. Net sales declined 6.30% to Rs 702.36 crore in the December quarter of FY20.
On a standalone basis, net profit rose 6.18% to Rs 80.63 crore on 6.30% decline in net sales to Rs 702.36 crore in Q3 FY20 over Q3 FY19. The result was announced post market hours on Friday, 14 February 2020.
Net sales was affected by the overall slowdown in the economy, and in particular the power, industrial and communication sectors, with optic fibre cables being affected the most (a contraction of more than 30%). Also commodity prices tracked lower during the quarter leading to lower realizations, the company said.
On volumes, electrical wires grew by 5%, while automotive wires grew by 17% with addition of new customers. In the communication sector, the difficulties being faced by the Telecom companies (both private and public) continued with near zero investment in fiber/cables. While the overall requirement of investment in cables continues to be large, the current financial woes of the sector are expected to continue for a few more quarters.
New businesses growth was excellent, with all product lines (fans/lamps/switches/switchgear) improving volumes by more than 30% over the corresponding period of the previous year; 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, the firm added.
Finolex Cables is a manufacturer of electrical and communication cables.
Shares of Finolex Cables ended 0.08% higher at Rs 380.90 on Friday.
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