Sharekhan Picks Electricals Stock To Buy After Decent Q2, TP Rs 1100

Sharekhan has recommended investors to buy mid cap consumer durables sector stock Finolex Cables Ltd with target price of Rs 1100 apiece. Current market price of Finolex Cables shares is Rs 922.95 per share with intraday gain of 0.96%. Finolex Cables shares offered shareholders return of 68% YTD and rallied 222% in last 3-years. For Q2FY2024, Finolex reported better-than-expected OPM, which led to 7% beat in EBITDA, while revenue was in line with our estimate.

The topline increased by 8.9% y-o-y to Rs. 1,187 crore. Electric cables reported 12.5% y-o-y growth to Rs. 989 crore, said the analyst. Check details below:

Finolex Cables Share Performance & Return Over Years: Last trading price of Finolex Cables share is Rs 922.95 apiece with intraday rally of 0.96%. Its 52-week high price is Rs 1219.10 per share and 52-week low price is Rs 491.05 per share, respectively. The company has a market capitalisation of Rs 14,115.54 crore.

Finolex Cables shares gained 65% in last 1-year, soared 62% in last 2-years, and offered return of 222% in last 3-years. In last 5-years, Finolex Cables shares witnessed a rally of 99% and rose 1205% in last 10-years.

Finolex Cables Valuation: According to Sharekhan, "The company's focus on strengthening its dealer/distributor channels across geographies and enhancing its product availability will likely yield the desired results. Family feud and court cases have created an overhang on the stock, thus we are reducing our target multiple to 22x and has lowered our TP to Rs, 1,100, while maintaining Buy rating on the stock. Any clarity on the resolution of this issue could result in a significant run-up in the stock."

Finolex Cables Financials: The company for the quarter ended September 2023 reported its consolidated profit at Rs 97.96 crore as against the net loss of Rs 95.38 crore during the corresponding period of last financial year, as per the company's BSE filing. Meanwhile, the company witnessed a decline of 6.16% in its revenue from operations to Rs 883.15 crore for the quarter under consideration as compared to Rs 941.13 crore in the same tenure of last fiscal.

Disclaimer: The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.