Finolex Cables, Finolex Industries surge up to 13% on heavy volumes

Finolex Cables, Finolex Industries surge up to 13% on heavy volumes

  • 24.03.2025 06:15
  • business-standard.com
  • Keywords: Stock Surge, Market Movement

Shares of Finolex Industries and Finolex Cables surged up to 13% on heavy volumes amid trading activity of over 17.63 million shares. Both companies clarified they had disclosed all required information under SEBI regulations. Adani Enterprises and UltraTech Cement's entry into the cables sector may intensify competition, potentially impacting growth and margins for existing players.

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Estimated market influence

Finolex Cables

Positivesentiment_satisfied
Analyst rating: N/A

Shares surged up to 13% on heavy volumes

Finolex Industries

Positivesentiment_satisfied
Analyst rating: N/A

Shares surged up to 13% on heavy volumes

Context

Business Insights and Market Implications Analysis

Key Facts and Data Points:

  • Stock Performance:

    • Finolex Cables and Finolex Industries shares surged by up to 13% on the BSE in Monday’s intra-day trade.
    • Finolex Cables reached ₹196.95, while Finolex Industries saw significant trading activity.

  • Trading Volumes:

    • A combined 17.63 million shares, representing 2.8% of the total equity of Finolex Industries, were traded on NSE and BSE.
    • This represents a seven-fold jump in average trading volumes for Finolex Cables.

  • Market Position:

    • Both stocks are down 45% from their respective 52-week highs of ₹355.70 (Finolex Industries) and ₹1,700 (Finolex Cables).
    • Finolex Cables hit a 52-week low of ₹781 on March 17, while Finolex Industries reached ₹166.75 on March 3.

  • Competitive Landscape:

    • Adani Enterprises (AEL) has entered the cables & wires (C&W) sector through a 50:50 Joint Venture (JV) with Praneetha Ecocables.
    • AEL’s JV aims to manufacture, market, distribute, and sell metal products, cables, and wires.

  • Market Entry by Aditya Birla Group:

    • UltraTech Cement (part of the Aditya Birla group) announced a ₹1,800 crore investment in the C&W segment over two years.

Market Trends and Business Impact:

  • Short-Term Rally:

    • The 13% surge in stock prices indicates investor interest, but both stocks remain significantly below their 52-week highs, suggesting underlying concerns or speculative trading.

  • Intense Competition:

    • Adani’s entry into the C&W sector follows UltraTech Cement’s announcement, signaling increased competition. This could lead to:
      • Pressure on margins due to price competition.
      • Market share battles among existing players like KEI, Polycab, RR Kabel, and Finolex Cables.

  • Strategic Considerations:

    • New entrants may drive innovation and investment in the sector, potentially benefiting consumers but posing challenges for established firms.
    • ICICI Securities predicts that Aditya Birla’s ₹1,800 crore capex could capture ~8% market share, impacting growth and margins for competitors.

  • Long-Term Effects:

    • The entry of major players like Adani and UltraTech may lead to consolidation or increased M&A activity in the C&W sector.
    • Existing companies like Finolex Cables and Finolex Industries may need to focus on cost optimization, differentiation, and innovation to maintain market relevance.

  • Regulatory Implications:

    • While no direct regulatory impact is mentioned, increased competition may prompt regulators to monitor anti-competitive practices or ensure fair pricing in the sector.

Conclusion:

The surge in Finolex Cables and Finolex Industries shares amid heavy trading volumes highlights investor sentiment, but their long-term performance remains uncertain due to intense competition from new entrants like Adani and UltraTech. The market dynamics suggest a challenging environment for existing players, requiring strategic adjustments to maintain profitability and market share.