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Finolex Cables is down 11% in one month

Finolex Cables Ltd. (NS:FNXC), one of the oldest cable and wire companies in India, reported its best-ever annual profit for FY21 at Rs 461.5 crore. Its numbers for Q1 FY22 were impacted because of the second COVID wave but it still managed to beat analyst estimates.

Net sales zoomed up 79.08% to Rs 675.36 crore in June 2021 compared to Rs. 377.12 crore in June 2020. Net profit went up 57.46% to Rs 55.08 crore compared to Rs 34.98 crore in June 2020.

Brokerage firm Jefferies has a buy call on the stock with a target price of Rs 600. It said, “We slightly tweak FY22-24 EPS, broadly retaining EPS. Over FY21-24e, we pencil FNXC’s sales/PAT at +12%/25% CAGR, aided by improving margin in Electricals, traction in margin-accretive Appliances, new launch (PVC Conduits) and CAPEX commissioning. Note that FY21 was a weak base (EPS dip of 30% YoY). FNXC’s present valuation at 15x/13x PE on FY23/24 appears undemanding, given its strong franchise, focus on margin-accretive Electrical category and a robust B/S.”

The stock has fallen 11.21% in the last month and is currently trading at Rs 468.2. Jefferies’ target represents a 28% upside from current levels. Investing.com

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