Polycab drops after poor Q1 result

Polycab India lost 3.99% to Rs 815.55 after the company posted a 12.57% fall in consolidated net profit to Rs 117.60 crore on a 49.95% drop in net sales to Rs 976.60 crore in Q1 June 2020 over Q1 June 2019.

The Fast Moving Electrical Goods (FMEG) company's consolidated profit before tax before exceptional items declined by 86% to Rs 29.4 crore in Q1FY20 from Rs 206.6 crore in Q1FY19 on account of adverse operating leverage. PAT margin at 12% in Q1FY20, was up 510 basis points YoY from Q1FY19 reflecting few one off gains.

Polycab India's wires and cables business declined 51% to Rs. 793.5 crore in Q1 June 2020 from Rs 1610.4 crore in Q1 June 2019 hurt by lockdown but partly supported by wires and exports. FMEG business declined 43% year on year to Rs 137.8 crore in Q1 June 2020 from Rs 240.1 crore in Q1 June 2019. While lighting and agro pumps business witnessed better traction, fans business was impacted as April and May are typically key pre-summer stocking periods.

Commenting on the financial performance, Inder T. Jaisinghani, chairman and Managing Director, Polycab India, said Q1 was significantly impacted by headwinds of COVID19. However, the company saw progressive signs of improvement as the restriction in movement eased and this could improve further as India unlocks gradually.

Polycab India is a leading electricals brand. The company is the largest manufacturer of wires and cables in India and a fast-growing player in the FMEG space. It manufactures and sells various types of cables, wires, electric fans, LED lighting and luminaires, switches and switchgears, solar products, pumps and conduits and accessories.

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