In an interaction with Mahesh Viswanathan, Chief Financial Officer, Finolex Cables

We are constantly exploring adjacent segments like home appliances where we can leverage our core competencies

In Q4FY23, the company’s revenue surged by 3 per cent on year-on-year (YoY) basis while the net profit zoomed more than 37 per cent from the corresponding quarter last year. What were the contributing factors to the company’s performance? 

Whereas the comparable revenue increased by 3 per cent YoY, profitability improved from volume-led growth both in electrical and communication cables, pricing actions in electrical cables and improved performance in communication cables.

At the moment, what are your top three strategic priorities? 

In the established wire and cable business the focus has been to increase the sales volume of our products while mitigating input cost pressures by relying on pricing action. This strategy has helped us to expand our market share, strengthen our customer loyalty and enhance our brand reputation. We are always looking for new opportunities to grow and innovate. That is why we are looking to market and achieve product penetration of our new businesses of fans, lights, water heaters, conduits, switches, switch gear, etc. We are constantly exploring adjacent segments like home appliances where we can leverage our core competencies.

This will enable us to meet the emerging needs and preferences of our customers. In addition, we are investing in improving our distribution and supply chain capabilities to ensure that we can deliver our products and services to our customers in a timely, reliable and cost-effective manner. Over the last two years, the company has grown its distributorship to 600 and retail network to 150,000. We plan to increase the retail network to 200,000 over the next one year. We want to piggyback on the retail network and distributorship to penetrate the Tier II and III cities for our fast-moving electrical goods’ business.

We are also optimising our inventory management, logistics and procurement processes to reduce waste and enhance quality. We are committed to providing excellent customer service and support to our customers across all our businesses. We are also implementing various initiatives to increase customer engagement, loyalty and retention, such as loyalty programmes, feedback surveys, referral schemes and personalised offers. By pursuing these priorities, we believe we will be able to achieve sustainable and profitable growth for our company and create value for our stakeholders.

What efforts are you taking to maintain current growth? Are you looking for growth organically or via mergers and acquisitions?

Our company is on a growth trajectory and we are expanding from just a wire and cable company to one offering all lighting, electrical and home appliance solutions. For the growth of the company we are constantly on the lookout for inorganic growth. The moment we find any lucrative deal and a value addition to the company’s product offerings and revenue growth, we will evaluate.

The communication cable segment experienced a growth of over 50 per cent in OFC volume while all the other products in the communication segment witnessed a growth of more than 25 per cent. What factors contributed to the performance of this segment and what is your outlook for the future of the communication cable segment?

All product lines within the communication segment performed well. With over 850 million mobile users, our country’s communication infrastructure requires substantial capacity additions to be able to provide users with superior experience and we expect considerable growth from this sector. Going forward, with 5G requiring fibre optic cables in exponential numbers, there is solid potential for us to grow.  After the 5G auctions last year, telecom operators have become aggressive in launching 5G networks on a pan-India basis with the intent to cover majority of the Indian market by the end of 2023.

This is resulting in increasing demand for optical fibre cables. At the same time the demand for last mile connectivity is also increasing and hence we can see increasing sales of optical fibre, which is going to spiral upward in time to come. To meet the demand of the fibre optic business, we have set up plants at Urse and Goa. In addition to the production of OFC cables we have invested in backward integration for the production of glass fibre, glass rowings and FRP rods. We are also planning to further increase our capacity to meet the demand curve.