New Delhi: Finolex Cables Ltd., (FCL) at the meeting of its Board of Directors held today approved results for the second quarter of the financial year 2019-20.
Net Sales for the quarter ended September 30th 2019 were Rs 715.7 crores as against Rs714.0 crores for the corresponding period of the previous year representing a flat growth in overall revenue.
Growth in Net Sales were affected by slowdown in automobile, industrial and communication sectors, with Optic Fibre Cables being affected the most (a contraction of more than 25%). Further commodity prices continued to fall in the quarter leading to lower realisations.
On volumes, Electrical Wires grew by a healthy 12%, while the agricultural applications grew by more than 25%. In the communication sector OFC volumes declined due to slowdown in Govt spending as evidenced by the financial difficulties currently being faced by BSNL/MTNL etc. It is expected that the recent announcement by the Govt to revive BSNL/MTNL will have a positive impact in the coming quarters. Non governmental spending in fibre assets by telecom companies has also seen a substantialdip in the recent months, with the major telcos having to financially restructure themselves. The subdued level of activity is expected to continue for a few quarters more.
New businesses growth was subdued, contributing Rs 16 crores as against Rs 18 crores in the previous year. Volume showed improvement; however higher spends on advertisement and market development activities resulted in lower profitability. As volumes improve further, it is expected that profitability should improve as well.
Profit for the quarter, before taxes, was Rs.139.1 crores, as compared to Rs.132.9 crores in the previous year. Your Company has opted for following the recently announced lower tax rates and as a consequence Profit for the quarter, after taxes, improved to Rs.123.1 crores against Rs.92.9 crores in the previous year.