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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.

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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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