Finolex Cables Initiating Coverage Report From Microsec

We expect it to post healthy 18.3% revenue CAGR over FY14-FY17E. With strong backward integration coupled with product visibility in the west & southern region, operating margin is likely to improve by 58 bps, driving a net profit CAGR of 22.3% over FY14-FY17E.Lower working capital and capex would improve the return ratios and free cash flow in the near to longer time. We see upside momentum of FCL’s earning for FY15E. Therefore we initiate coverage on FCL with a “STRONG BUY” recommendation and a target price of INR 333.

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