Finolex Cables sees improvement in electrical segment

Finolex Cables, in an investor presentation, observed that there has been an improvement in the electrical segment, following gradual resumption of economic activities.

In the Electrical Cables segment, Finolex Cables reported a revenue of Rs.538.70 crore during Q2 (July to September) of FY21. This was 62.4 per cent higher than that in the immediately preceding quarter. However, when compared year-on-year, this revenue was 8.4 per cent lower. (See table)

Finolex Cables observed that widespread investment in infrastructure, strong emphasis on universal electrification, urbanization and housing sector growth will push the growth in electrical cables in the coming days. The government’s push towards renewable energy will also push the demand for electrical cables, Finolex said.

Regarding the communication cables segment, Finolex said that both COVID-related disruptions as well as structural issues in the industry continue to adversely impact this segment. All the same, the company’s revenue in this segment improved 160.2 per cent quarter-on-quarter in Q2 of FY21.

In the relatively new segment of fans, water heaters, lamps, switches and switchgear, efforts at improving distribution have started paying off reflecting in higher volumes, Finolex Cables said. In Q2 of FY21, revenue from this segment showed a 45-plus per cent growth, both year-on-year and quarter-on-quarter.

 

Improving distribution

In a recent exclusive interaction with T&D India, Deepak Chhabria, Executive Chairman, Finolex Cables Ltd, when asked about competition from local brands in towns and tier-2 cities, said: “It is estimated that even today, only 65 per cent of the industry lies in the organized sector. The unorganized sector does provide competition, though many of them are struggling to survive. Currently, the Indian per capita consumption of wires is only 0.5 kg while the global average consumption is 2.7 kg. The industry is expected to grow over the coming years.”

“We are working on reaching this untapped market by increasing our penetration in tier-2 and tier-3 towns. Our sales teams are working on signing up an additional 100,000 retailers over the next 5 months, to bring our retailer count to 150,000 by March 2021. We have also launched an affordable wire range to meet the needs of this audience. Simultaneously, we are running educational programs targeted at the influencer community of electrical contractors and electricians that explains the long-term benefits in installing branded quality wires.”