At Rs 750, should one invest in Finolex Cables? Anand Rathi shares target price

Down 36 per cent in 2025 so far, Finolex Cables shares quoted at about Rs 750 apiece today on stock exchanges. The company's Q2 performance was steady. While revenue growth remained modest, Ebitda and PAT rose sharply, supported by strong demand in industrial and solar cables. The communication cables segment stayed muted, but Anand Rathi said the commissioning of preform and fibre-draw facilities should aid margin expansion as fibre prices stabilised. 

With better visibility into demand in H2 FY26, new FMEG launches and a strong balance sheet, it views earnings outlook as robust for Finolex Cables.

The domestic brokerage reiterated its 'Buy' rating on the stock with a 12-month target price of Rs 975, assigning 20 times September 2027 EPS to the core business in its SOTP framework. The brokerage said the company’s healthy margin trajectory, improving demand indicators and upcoming fibre capacity placed it well for sustained earnings growth.

The brokerage said the upcoming preform and fibre-draw units would support margin recovery in the communication cables business. Stabilising fibre prices and a pick-up in state-level BharatNet tenders were expected to improve utilisation. Near-term growth in electrical cables, it added, would depend on a rebound in agriculture demand and steady improvement in real-estate activity.

Post Q2, Anand Rathi tweaked its FY26, FY27 and FY28 revenue estimates by 2-4 per cent with corresponding adjustments to Ebitda margins. It expected Finolex’s revenue and net income to deliver 10 per cent and 9 per cent CAGR respectively over FY25–28, supporting an expansion in return ratios. The brokerage maintained its 'Buy' call with a target price of Rs 975 against Rs 1,031 earlier.

Volatility in raw-material prices, a sharp reversal in Finolex Industries’ profitability, and delays in commissioning upcoming facilities or backward-integration projects were flagged as key risks to margin expansion in FY26–27.