Finolex Cables' record is clean on its face: no subsidiaries, routine revenue recognition, and a dividend-paying balance sheet. Three things deserve attention: a 49% joint venture that has absorbed ₹208.57 crore of impairments and ₹185.65 crore of guarantees while its net worth stays "substantially eroded," a seven-year promoter-family voting war that has twice left the board below the legal minimum, and an operating cash flow that has collapsed to 0.07x of profit in FY2025-26.
Key findings
- Seven years of write-downs on a JV that still loses money
Major- Finolex Cables has recognised cumulative impairment of ₹208.57 crore on its investment in Finolex J-Power Systems Limited (FJPS) as at March 31, 2025, including ₹12.00 crore in FY2024-25. The standalone carrying value fell from ₹60.27 crore in FY2020 to ₹22.71 crore in FY2025, with impairment charges in every year. The auditor flagged this as a Key Audit Matter every year from FY2019-20 through FY2024-25, citing continuous losses and dependence on partner support. - Guarantees to the loss-making JV keep rising
Major- The corporate guarantee to FJPS's bankers for working capital rose from ₹106.75 crore in March 2023 to ₹185.65 crore in March 2026. The company's own FY2024-25 statements say FJPS's "net worth has been substantially eroded" and that it, along with its partner, has provided unconditional financial support. On 13 December 2025, the company gave a further irrevocable guarantee of ₹39.20 crore to ICICI Bank for FJPS, in proportion to its 49% shareholding. - Guarantees, a voting-rights suit, and confirmed GST demands pile up
Major- The guarantee exposure to the net-worth-eroded JV reached ₹185.65 crore by March 2026. A civil suit over votes cast by Orbit Electricals (30.70%) and Finolex Industries (14.51%) filed in June 2019 remained pending as of the FY2025-26 secretarial audit report dated May 16, 2026. On March 31, 2026, the Additional Commissioner, Central GST, Dehradun confirmed a demand of ₹29.46 crore, and on December 22, 2025, the Commercial Tax Officer, Chandigarh confirmed a demand of ₹22.01 crore for FY2021-22. - A seven-year promoter voting war has shrunk the board twice
Major- Orbit Electricals and Finolex Industries, together holding 45.2% and under promoter Mr. Prakash Chhabria's control, voted against every director reappointment at the AGMs of 2019, 2020, and 2021. At the AGM of 29 September 2023, the reappointment of Mr. Deepak Chhabria as Executive Chairman was defeated, and he ceased to hold the role on 16 October 2023. The board fell below the minimum of 6 directors twice, from 22 December 2023 to 19 March 2024, and again after 28 September 2024. - Operating cash flow has collapsed against profit
Major- FY2025-26 CFO was ₹49.08 crore against PAT of ₹714 crore, a ratio of 0.07x, down from 0.30x the prior year. Other income made up 36.7% of PBT in the latest period. The board recommended a final dividend of ₹9.00 per share for FY2025-26, a cash outflow of ₹137.7 crore if approved, while committing ₹500 crore to capex at Urse and Goa. - No subsidiaries, but the JV has absorbed ₹231.3 crore of equity
Major- Finolex Cables had no subsidiaries in any year from FY2019-20 through FY2025-26. Equity infusions into FJPS totalled ₹231.3 crore by end FY2022-23, with the JV's net worth "substantially eroded" in four annual reports. The other JV, Corning Finolex Optical Fiber, was liquidated on 06 June 2024, with Finolex Cables receiving ₹14.32 crore and recognising a gain of ₹12.57 crore. - Policy choices have added profit in several years
Minor- Finolex Cables recognised a ₹12.57 crore gain on the Corning JV liquidation in FY2023-24. It recorded a ₹6.01 crore past-service cost following the merger of 29 labour laws into four Labour Codes effective November 21, 2025. The company's election of the concessional tax rate under section 115BAA in FY2019-20 lifted PAT to ₹402.5 crore from ₹344.1 crore, partly due to the rate switch. - Receivables stress sits in government telecom and OEM customers
Minor- Trade receivables from the OEM cluster of Minda, Bharti Airtel, Reliance Jio, Aptiv, Dhoot Transmission, and Yazaki totalled ₹218.25 crore as at 31 March 2026, up from ₹108.45 crore two years earlier. Credit periods run up to 180 days for specific customers including government-owned entities, with no interest charged. Advances from customers rose to ₹45.05 crore in FY2024-25 from ₹29.01 crore in FY2023-24.
What to watch
- 58th AGM, 28 September 2026. Shareholders vote on reappointment of five directors, including a special resolution for Mr. Sriraman Raghuraman to continue beyond age 75.
- Final dividend payment. The ₹9.00 per share dividend is payable by 27 October 2026, subject to approval at the AGM.
- Bombay High Court appeal. Outcome on executive-director reappointment and remuneration, pending as of the FY2024-25 annual report.
- GST demand resolutions. Demands confirmed in FY2026, Dehradun ₹29.46 crore, Chandigarh ₹22.01 crore, Ahmedabad ₹15.20 lakh, Indore ₹1.11 lakh, received between December 2025 and March 2026.
- FJPS impairment test, March 2027. The FY2025-26 test used a WACC of 14.55% and terminal growth of 5% with no impairment charge disclosed for the year.
Bottom line: This is a disclosed and audited record with a real, dividend-paying business underneath. The risk sits in two places: the JV, which has consumed capital and guarantees for seven years without turning profitable, and the promoter voting war, which has twice broken the board. Read the cash-flow line with that in mind, and watch whether the FY2026-27 impairment test finally takes a charge on FJPS.