Hold Finolex Cables; target of Rs 412: Sharekhan
Sharekhan’s research report on Finolex Cables
Finolex posted lower than estimated financials led by weak performance in electrical and communication with decline in OPM and net profit. We expect slowdown in construction and funding crunch in OFC to limit its revenue growth along with higher ad spends in FMEG to weigh on overall OPM leading to downward revision in net earnings for FY2020-FY2021E. The issue regarding re-appointment of key managerial personnel also remains unresolved with the matter now sub-judice.
We reiterate our Hold rating with a revised PT of Rs. 412, on account muted net earnings growth during FY2019-FY2021E led by tough macro environment in its core verticals.
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