The Hindu Business Line : Finolex lines up plans to make insulated cables

THE board of directors of the Pune-based Finolex Cables Ltd (FCL) has approved projects for the manufacture of medium voltage (up to 66 KV) insulated power cables and miniature circuit breakers (MCBs), and earth leakage circuit breakers (ELCBs).

Both the projects would be taken up for implementation at the Urse facility near Pune where the company has existing infrastructure.

Speaking to Business Line, Mr P.B. Parasnis, Director (Finance), said that this segment was being entered into as it was "missing in the bouquet of products" being offered to customers.

He added the investment that would be going into this new project would be close to Rs 50 crore, which would come from internal accruals.

The MCBs would be ready for the domestic market by April 2006 and the power cables a year down the line.

Mr Parasnis said that the company was estimating revenue of Rs 65 crore from the power cables segment by the end of the first year in market, while the MCBs are expected to contribute about Rs 15 crore by the first year.

He added that the market for MCBs in the domestic segment was close to Rs 150 crore.

According to him, the company would be able to maintain its topline growth of 25 per cent for the current fiscal, though there was a slight dip during the year.

He added that with the telecom cable business back in action, it would be able to meet its target.

Q2 net rises 14 pc: Announcing the results for the second quarter, Mr Deepak Chhabria, Managing Director, said that FCL had recorded 14 per cent increase in net profit at Rs 5.71 crore (Rs 5 crore).

However, sales turnover during the quarter under review fell to Rs 145.19 crore (Rs 159.36 crore). The EPS stood at Rs 1.87 (Rs 1.63).

Mr Chhabria said that the electrical cables business accounted for 82 per cent of the sales turnover, clocking seven per cent growth.

The telecom cables business did not show expected growth mainly due to delayed allocation, compared to the previous year, of JFTCs (jelly-filled telephone cables) for supply to BSNL.

FCL received allocation for supply of 1,142 TCKM (thousand cubic km) to BSNL. The order execution commenced during the third week of September and the major part of the order is expected to be executed in the quarter ending December 2005.

"FCL has been able to perform well in the competitive market conditions, especially in the electrical cables business. The market is taking time to adapt to unstable copper prices, which are recording new highs. We have been able to adjust our selling prices optimally while keeping our business momentum going."

Mr Chhabria also said that implementation of the electrical switches project was progressing satisfactorily and the launch of electrical switches is expected to take place in January 2006.

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