Birla Cable Limited (Formerly known as Birla Ericsson Optical Limited) is a premier company in the field of Telecommunication Cables, which offers one of widest portfolio of Copper and Fibre Optic cables under its umbrella. A division M. P. Birla Group, Birla Cable Limited has come a long way to establish itself.
It all started in the year 1992, having technology collaboration and financial partnership with globally renowned Ericsson Network Technologies AB of Sweden as a Joint Venture Company. By way of acquiring the shares of Ericsson recently, Birla Cable Limited has become a truly global Indian Company which has a reach of more than 60 countries, fully capable to cater to all the needs of communication cables across the segments.
The company has EPS Rs.16.96 TTM and trading in P/E multiple of 9.68 against the industry average P/E of 23.85. The company has remarkable increase in sales and profit margin both year on year and quarter on quarter basis.
Birla Cable’s Revenue is grown 54% in FY 18 over FY 17 and the same is grown by 91% for the three quarters ending in Dec 2018 over the corresponding period in the previous year. During the year 2017-18, Revenue from outside India accounts to 32% which is increased from 26% during 2016-17.
Net Profit of the company for the FY 18 is increased to Rs 16.13 crore from Rs 3.33 crore during the FY 17. RONW of the company stood at 14.82 % for the FY 18 and the same is increasing phenomenally during the current financial year.
Sales for the first three quarters of the current financial year 2018-19 amounts to Rs 401.95 crore which is an increase of 90% year on year basis . Net Profit amounted to Rs 41.95 crore for the first three quarters ending December 2018 crore which is an increase of 418% year on year basis. EPS of the company for the three quarters of current FY 19 amounted to Rs 13.99 against Rs 5.38 for the whole financial year 2017-18.
Net Profit amounted to Rs 41.95 crore for the first three quarters ending December 2018 crore which is an increase of 418% year on year basis. EPS of the company for the three quarter of current FY 19 amounted to Rs 13.99 against Rs 5.38 for the whole financial year 2017-18.
Free Cash Flow is positive in FY 16 & 17 but negative during FY 18 due to increase is inventory and trade receivables. Considering the sales growth in FY 18, this is justified. Promoter Holding in Birla Cable is 66.35% of which 6.38% is being pledged. There is no change in promoter holding for more than 3 years. Considering the consistent growth in sales and net profit, this will become a Multibagger and hence this can be accumulated in phased manner.
Market price of the share closed at Rs 64.75 by the end of 2017, reached high Rs 229.40 during November 2018 and presently trading at Rs 163.75 (February 22, 2019), having 52 H/L at Rs 229.40 / Rs 56.00.
As a disclosure, I would like to mention that I don’t own any share in Birla Cable as of now.