Finolex Cables Ltd (NSE: FINCABLES) Q3 2026 Earnings Call dated Feb. 12, 2026
Corporate Participants:
Pratik Patil — Investor Relations
Mahesh Viswanathan — Chief Financial Officer
Analysts:
Pratik Patil — Analyst
Vidit Trivedi — Analyst
Shreya Vazir — Analyst
Srinivasan — Analyst
Vineet — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q3 and 9 months FY26 earnings conference call of Finolux Cables Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Pratik Patil from Dentsu One Investor Relations Team. Thank you. And over to you sir.
Pratik Patil — Investor Relations
Thank you Steve. Good evening and thank you all for joining us on the Pinolex Cables Q3 and 9 month FY26 earnings conference call. Today we have with us Mr. Mahesh Viswanathan, Deputy CEO and Chief Financial Officer from Pinolex Cables Limited. We will begin the call with the opening remarks from the management after which we will have the forum open for the interactive Q and A session. I must remind you that the discussion in today’s earnings call may include certain forward looking statements and must be viewed therefore in conjunction with the risk that the company faces.
Please restrict your questions to the quarter performance and to strategic questions only. I would now request Mr. Vishwanathan for the opening remarks. Thank you. And over to you sir.
Mahesh Viswanathan — Chief Financial Officer
Thank you Pratik and good evening ladies and gentlemen. Thank you for joining this call. Very quickly let me take you through the quarter with some brief remarks or bullet points on the performance and then I will open up for questions. You must have seen the results that were hosted on both the Exchange as well as our own website day before yesterday. We’ve had a pretty good quarter in terms of overall performance. Revenue was close to 1600 crores for the quarter and for the nine month period was about 4370 crores in the quarter. An incremental performance of about 35% quarter on quarter and for the nine month period about 17% higher than the corresponding period last year.
As a consequence, EBITDA numbers also showed an improvement 12% quarter on quarter and 17% over the nine month period. PAT also reflected 10% increase quarter on quarter and 18% over the nine months period. In terms of performance, this was not just a price led performance, it was also a quantity led performance. So overall, wires and cables, the volume increase was more than 25 26%. Individual product lines performed slightly differently. Electric wires was about 28% in the quarter. Auto cables was almost 42% in the quarter. Industrials was about 28 and power cables were also about 22%.
Big new entrant for us during the quarter was solar cables. So we are currently hitting close to 80 to 85% of our capacity that we built up last year. So that’s good news again. What didn’t do so well was the agricultural obligations. It was off season and there were pricing issues. So the overall numbers on the agricultural side was a little lower than the previous year. The other part of the quarter was the continued increase in copper prices in commodity prices. We had to take multiple price corrections overall during the quarter we took a correction of about 12% in the selling prices and most of the input price increases have been covered.
Utilization Like I mentioned earlier, solar, auto and power cable plant utilizations are in the late 70s. Others are catching up. If I move to the communication cable side then OSC volumes were up by almost a third. The issue in this segment is that during the quarter and prior quarters fiber prices had been depressed. We are now seeing a reversal of that trend. Globally fiber prices are hardening. The overall demand outside of India in fact including India has strengthened considerably and we are now witnessing a period of shortage both on the preform side as well as on the fiber side.
That is as we speak today and prices are hardening. So from an average of about slightly under $3 which was prevailing due to during quarter three the prices currently as on date have are closer to $5 mark. So that’s the extent of the demand pull that has happened over the last few months. So the net effect of this will not will be seen in the coming quarters. As a corollary, the investment that we are making on both the preformed factory as well as in the expansion on draw towers those investment the work is progressing fairly good.
Currently the preformed factory is under production trials and we expect to commission it within this fiscal the fiber draw expansion the building is more or less ready equipment for phase one that is to take up the fiber capacity from 4 million to 6 million. That equipment is already at site and as soon as the clean room work is completed we will start the installation there. And the second part from 6 to 8 million that equipment is expected to reach by March end so we expect to have a fiber draw capacity of about 8 million km by end of Q1.
In the coming fiscal capex in the quarter we spent about 36 crores and for nine months it is 146 crores in line with the projections that we had made in the beginning of the year. So most of those projects should be coming to a fruition by now. We had a very good quarter like I said earlier and that also reflected in the cash flows. The cash flow from operations was about 78 crores for the three months against 9 crores in the corresponding period last year and 220 crores for the nine months against 75 crores in the corresponding period of last year.
So this is broadly the comments on the performance. Additionally, one single point I would like to make is that after the announcement of the new Labour Code going live effective 21st of November, we have reassessed the obligations towards gratuity and have taken a provision of 6 crores which has been booked in this current quarter. That’s it from me for opening remarks. So now I’m open to questions. Thank you.
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Vidit Trivedi with Asian Market Securities. Please go ahead.
Vidit Trivedi — Analyst
Yeah, hi sir, thank you for the opportunity. Sir, any Update on the BharatNet project as of now and just wanted to know your views on the way commodity is behaving and the overall outlook and how many price hikes have we taken as of today?
Mahesh Viswanathan — Chief Financial Officer
Okay, so let me talk about the commodity first. Well, it’s very difficult to predict where it will reach and how long it will stay there. So even in the last couple of weeks you have seen movements which have taken it up to 14,000, then it is back to 12,800 and then again back to 13,200. So it is a bit of a yo yo at this point in time. Difficult to predict how the swings are likely to be. What we have always been doing and we will continue to do is to not take long calls, look at what we need to produce and therefore procure only that much quantity and buy on average, which is what we’ve been doing all along and treat it as a pass through to the extent possible.
While there will be a lag in passing on any changes that will even odd over a longer period of time. The next part of your question was how many price changes have we taken? Last quarter we took five with an overall correction of about 12% in the selling prices. This quarter between January and today we have already done two changes. So as and when it is necessary depending on how the fluctuation is or how big the fluctuation is, we will take that call. We also need to keep in mind as to what level the market can bear because at some point things might become inelastic.
So we keep that in mind. Your second point was on Bharatnet. As I mentioned in the earlier call, we have not secured a direct position on the BharatNet Phase 3 tenders that were floated by BSNL. But given the fiber position in the global market at this point in time, we are getting enquiries from participants who have secured positions. So it’s a little too early yet, but we are hopeful that there will be adequate business for us over the next two years from these projects.
Vidit Trivedi — Analyst
Got it sir. What’s the percentage in terms of percentage the price have you taken during this quarter?
Mahesh Viswanathan — Chief Financial Officer
Five, I think.
Pratik Patil — Investor Relations
Sorry, five.
Vidit Trivedi — Analyst
Okay. The second question is on the inventory days they have, you know, improved significantly from 61 days, you know, from 69 to 61 days. So what are the structural changes in the supply chain? You know, we have taken in this area and can we expect this further room to improvement, for improvement, you know, bring it down to at least 50, 55 days in the coming quarters?
Mahesh Viswanathan — Chief Financial Officer
That would be a little difficult I think. I think what we are trying to do is to look at each segment of the inventory chains. So how much can, how much should be in raw material, how much in work in progress and how much in finished goods. So we have been squeezing all three at this and this can only happen when two things change. A, your supply from the raw material suppliers, that chain is kept open and there is a continuous feed from there. And B our operating efficiencies at the plant goes up and that will happen as capacity utilizations improve.
And the last one is at the field level in terms of improving service, which will mean the waiting period for the customers will be lower and we should be able to service practically on demand. So we are trying to squeeze all three areas and I think two month cycle across across the chain is reasonable given the fact that when you get into industrials and automobile cables, the number of SKUs are substantially large. It is not just like, it’s not like building where the number of SKUs are limited, but as you get into flexibles and auto cables, the number of SKUs are substantially high and you need to have sufficient production runs or minimum order quantity for each of those runs for you to run efficient operation.
So there will be a slight trade off between efficiency and in the overall efficiency numbers. And we try to limit it to about two months.
Vidit Trivedi — Analyst
Got it sir. Thanks a lot. I’ll just squeeze one more question. There’s a significant amount sitting in your capital work in progress. Almost ought 307 odd crores. So what’s the specific project it is tied to and when can we expect it to be commissioned?
Mahesh Viswanathan — Chief Financial Officer
A lot of it is tied up on the Preform project. So as I mentioned in my opening remarks, the Preform factory is right now, production trials are ongoing and we expect to commission the plant by next month. So when that is done out of the 300 about 230 or 220 somewhere around that will get capitalized. So then you will only be left with what is there for the fiber draw towers which will get capitalized in the coming quarter.
Vidit Trivedi — Analyst
Got it sir. Thanks a lot. All the rest. Thank you.
operator
Ladies and gentlemen, if you wish to. Ask a question, you may press star and 1. The next question comes from the line of Shreya Vazir with BMSP I Capital. Please go ahead.
Shreya Vazir — Analyst
Hi, good evening. Thank you for the opportunity. So sir, there have been a lot of talks on a few big players with deep pockets entering the space. So how do you see their capacities ramping up and what product segments of Finolex will get affected and how if you could just throw some light on if you see a meaningful impact on our business operations due to the entrance of these players.
Mahesh Viswanathan — Chief Financial Officer
Okay. So over the last one year there have been announcements from the. From. From the Birla side. They. They are coming in from their. The cement group. They are putting up a cable wire and cable factory and we are. Our information is that it is likely to get into production mode sometime next calendar year. The information that I have is it’s probably around second or third quarter next year and that will be on the wired side. So that will be in direct competition to us. The second piece of information was about Ajani’s getting into to wire and cables.
Barring the initial announcement, nothing more has been heard from them. So we do not know yet if their plans include introduction in 27 or 28 or 29. That is still something that we are not clear about. But yes, there will be competition prime to a large extent on the wire space. But we do believe that there is sufficient space for people to exist coexist. Competition will intensify and I think in a way that’s okay. We should be able to handle those pressures. Yeah, there’s not much that I am aware of besides this.
Shreya Vazir — Analyst
Okay, thank you. And my second question is what is Sinolex’s strategy to Grow its telecom cables business. As in what is the total market opportunity for players like Sinolex from the data center building in India and globally respectively. And how is Phenolex building its product portfolio to participate in this opportunity?
Mahesh Viswanathan — Chief Financial Officer
So yes, you’re right. Data centers will have an impact on not just the telecom operations, it will also have an impact on our power cable operations. Because data centers will be massive consumers of power and they will need fairly heavy sized pipes for power consumption besides fiber as well as LAN cables. So that could lead to more market size in terms of the optic fiber cables that would be available for sale. In that context, I think our integration backwards into making preforms, expanding our fiber draw capacity, all this is part of that, part of preparing for that additional volumes that are expected to come.
Currently the glass preforms are all imported by us. There is only one manufacturer in the country, which is Sterling. We would be the second entity there. And so that what it means is it reduces import dependence. It at the same time brings a certain self sustenance part there. Simultaneously we are also expanding our fiber draw capacity. We are doubling it over the next three months. So that would again make products available. Designs that would be necessary for data center applications. We already can make them, so that is not so big a challenge. The capacity to make those is also available with us at this point in time.
So again that is not a big challenge. So material availability at the moment is an issue. Like I mentioned in my opening remarks, the market has changed over the last three to four months and there is a. At the moment neither fiber nor preform is available for literally any amount of money. So the demand scenario has changed despite I think our additional capacity coming into play at this time is going to be beneficial to us.
Shreya Vazir — Analyst
Okay, thank you so much and all the best.
Mahesh Viswanathan — Chief Financial Officer
Thank you.
operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and 1. Participants who wish to ask a question to the management may press star and one. The next question comes from the line of Srinivasan with Sundaram mutual fund. Please go ahead.
Srinivasan — Analyst
Hello sir. Thank you for the opportunity. Am I audible?
Mahesh Viswanathan — Chief Financial Officer
You are not audible.
Srinivasan — Analyst
Is it better now? Can you hear me better now?
operator
Sir, can you please use your handset?
Srinivasan — Analyst
Yeah, I am using the handset.
operator
Okay. Okay.
Mahesh Viswanathan — Chief Financial Officer
Slightly better now. Let me try and see if I can hear you. Completely.
Srinivasan — Analyst
Sure. Yes. Two questions. Firstly, on our expansion that we’re doing, I think you mentioned that some 4 million kilometers we are going to 8 million kilometers by QMXY 26. So I don’t know, like what is the revenue that we could generate this asset. And if you can tell me like how the margin profile has improved, it will improve because we were mentioning about realization going up from about $3 to $5.
Mahesh Viswanathan — Chief Financial Officer
Correct. So over the last two to three years the demand globally was a little depressed in relation to capacities available. So prices which were running at about four and a half dollars had slipped to slightly about $2 over the last two 2.5 years. And that has now changed in the last few months. We understand that there is a lot of application in the defense industry. We also understand that there is a lot of applications in the data center industry overseas which is pushing this demand to these levels. And as the previous participant asked, as more and more data centers get up to a farm functioning stage in India, this demand in India will also increase.
Add to it the BharatNet and other programs that are likely to come in the future. I think over the medium and long term the demand is fairly robust. The issue in this industry has been where you are dependent on the telecom side and especially in our country. Bulk of the funding comes from government programs. And if that funding is not consistent or sustained over a period of time, then you do have blips. Plus government programs do have this tendency of time lag between announcement and tendering and then again execution. So those have been issues in this industry.
But I think with committed funds for those programs, we should see a period where over the next few years, besides data centers, you will also get in AI applications and a lot of fiber with will be required. The fiber design or construction might be different for different applications, but the overall demand is likely to be fairly robust. Currently we have a market share of about 1112 percent in India. The biggest player is Sterlite, followed by the Birla Stable and then hfcl. But we should be able to grow from here on with our additions to capacity.
Srinivasan — Analyst
So could you just answer the second part of my question? Like what is our current capacity? 4 million. What is the potential in terms of top line? And what margin do you think we can expect given that?
Mahesh Viswanathan — Chief Financial Officer
Okay, the top line potential is not simply a multiplication of the capacity times the fiber prices. The top line would depend on the cable selling prices. And again, cable selling prices would depend on the design of the cable. It should go up now with fiber prices going up, but depending on the configuration within the cable, prices can go up to 150,000 to 180,000 per km of different kinds of cable. So little difficult to estimate it. But let me try I think with the additional capacity that we have put up, total revenues from this can go to about 6, anywhere between 600 to 700 crores in a full year.
Srinivasan — Analyst
Okay. This is the additional revenue or the overall revenue.
Mahesh Viswanathan — Chief Financial Officer
You see sir, this would be the total revenue.
Srinivasan — Analyst
Okay. And margins, how is the margin improvement here for us given this? Prices have gone up.
Mahesh Viswanathan — Chief Financial Officer
If you look at our numbers, if you go back and look at our numbers, when utilizations were higher than 75% or so, we have generated margins, EBIT margins of around 9 odd percent. It’s only in the last three years or so that number has fallen to the levels they are now 2.5% or so. So there is a potential that it can go to about 8, 9%.
Srinivasan — Analyst
Got it, got it. Just one last question. We generate a very healthy amount of cash flow every year. So what is our plan in terms of reinvesting after this?
Mahesh Viswanathan — Chief Financial Officer
Okay, so I, like I mentioned in the beginning, capacity utilizations are starting to go up. I also mentioned to you that automobile and solar applications are touching their 80% numbers. So those are areas where we can look at additional investment. There is a need as well. Even within the construction wire, as we see capacities climbing beyond 70, we should start planning for something. So because planning to execution will take about year and a half, so as we see those numbers inching up and touching 70, we would start planning those. So that is, those are areas where we can, we will invest.
Whether it will happen next year or the year after that will depend on how quickly the ramp up happens. We had already mentioned other potential areas where we could grow. And two quarters ago we commissioned our E beam plant and that opens up multiple applications for us. So as we get the clearances and certifications, we should start investing for those applications as well. So these are possible areas.
Srinivasan — Analyst
Thank you.
Mahesh Viswanathan — Chief Financial Officer
Thank you.
operator
Thank you. The next question comes from the line of Vineet with Investech. Please go ahead.
Vineet — Analyst
Hi, good evening sir. Thank you for giving the opportunity and very strong set of numbers. Congratulations on that. So a couple of questions from, from my side. One is the inventory levels in the channel, given such a strong growth we’ve had and even the industry, and considering the price increases we’ve had, would it be right to assume that there would have been some bit of pre band which would have happened in Q3 and consequently, at least at the start of Q4, the channel inventories would have been much higher than usual?
Mahesh Viswanathan — Chief Financial Officer
I believe so, yes. The channel inventory would have been higher than usual? I believe so, yes.
Vineet — Analyst
And sir, if you were to hazard A guess how much could it be different than the usual levels?
Mahesh Viswanathan — Chief Financial Officer
I think for all the participants in this industry some amount of volumes were pushed by the constant commodity price increases the trade probably thought they would make. If you buy low and then as the price is increasing you would get to sell it at a higher price. To some extent I am sure that is there. But for whom? How much is difficult guess to do and I think I will refrain from that. But I am sure there was some.
Vineet — Analyst
So my second question is on margins now. Pre Covid or maybe 16, 17, 18, we used to do mid teens sort of EBIT margins for the cables division. Those subsequently came down to low teens and then subsequently now it’s in low double digits and sometimes also recorded high single digit for margins in that segment. Now I understand we’ve had a change in distribution model which had. Had. Has had an impact by 2 to 3% on those margins. But what has led to such a sharp margin drop in this segment and should we think that these are the bottoms and should they stabilize here or we should see an improvement from here?
Mahesh Viswanathan — Chief Financial Officer
Okay, I think a similar question was asked during the last call as well. Yes, there was a time when we used to do about 15, 16% but then we brought in distribution. So some money had to be surrendered there to ensure that the distributors costs are managed. So I think the sustainable level is anywhere between 11 and 12% above that in today’s context with intensified competition is a little difficult to sustain. You might have the odd quarter when you do better than that. But I think what should be sustainable would be between 11 and 12%.
We are slightly behind that at this point in time. That also has to do a little bit with the change in mix. More of automobile cable related sales or more of industrial products tend to depress the margin a little bit because of the. Because of the nature of that business. As the volume grow faster and higher on the construction side then the balancing would happen. So last quarter the margins were about 11.5% or so. This quarter it is dipped a little bit. So it depends on which quarter what takes higher share of the pipe. So the mix is also a little bit of an issue.
Vineet — Analyst
But so just as we were discussing some time back with competition likely to hit in the next 12 months time, don’t you think? Again that will have some bit of pressure if not much and consequently margin expansion from diesel will be tough.
Mahesh Viswanathan — Chief Financial Officer
There would definitely be some pressure. I don’t discount that at all. There would be some pressure and we need to be prepared to handle that. And I think one of the things that we are doing right now is to make sure that our channel continues to be motivated, that our distribution network continues to be motivated, and that we also educate them more about life cycle cost and things like that so that people understand that when they buy a product like ours, when you use it, you use it for 20, 30, 40 years. And so your investment at this point in time is going to pay you back over those 30, 40 years.
And everybody may not have the same level of quality that we have. So that is something that we would need to reinforce in our marketing pitch.
Vineet — Analyst
Okay, Understood. Thank you. Thank you so much.
operator
Thank you, ladies and gentlemen, Due to time constraint, that was the last question for today. I now hand the conference over to the management for closing comments.
Mahesh Viswanathan — Chief Financial Officer
Thank you, ladies and gentlemen, for participating in this conference today. I hope the interaction has been of use to you. If there are questions, please do reach out to us. Thank you.
operator
Thank you. On behalf of Finolex Cables Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.