Polycab India soars after good Q2 outcome

Polycab India jumped 5% to Rs 2751.15 after the company's consolidated net profit rose 35.3% to Rs 267.80 crore on a 10.8% increase in revenue from operations to Rs 3,332.36 crore in Q2 FY23 over Q2 FY22.

The company said that the growth in revenue in spite of high base was due to declining commodity prices and burgeoning inflation on the back of healthy volume growth in Cables and Wires business.

Profit before tax rose 34.3% year on year to Rs 358.45 crore in the quarter ended 30 September 2022. Total expenses rose 7.27% YoY to Rs 2,970.88 crore in Q2 FY23.

EBITDA surged 45.81% to Rs 426.8 crore in Q2 FY23 from Rs 292.7 crore in Q2 FY22. EBITDA margin was 12.8% in Q2 FY23 as against 9.7% in Q2 FY22.

Polycab said that the Wires and cables business revenue grew 13% on YoY basis to Rs 2,925.9 crore. Domestic distribution driven business continued to see strong momentum. Institutional business too saw healthy growth. Exports business exhibited strong growth of 75% YoY on a healthy base, contributing 13% to consolidated revenue in Q2 FY23.

FMEG business de-grew 12% YoY to Rs 303.2 crore mainly due to subdued demand environment, exacerbated by realignment in distribution strategy undertaken under project LEAP to improve long-term business growth. Fans business was affected on account of seasonality, inflationary environment and transition to the new BEE regulations. Switch business recovered from the lows of Q1 FY23, posting 123% QoQ growth.

The company said that it merged Fans vertical with Lights & Luminaries vertical and Retail Wires vertical with Switches & Switchgears vertical to unlock latent value through cross-selling opportunities and operational efficiencies.

Inder T. Jaisinghani, chairman and managing director of Polycab India said: We continued with our strong business performance in Q2, posting highest ever 2nd quarter revenue in the history of the company. Combined with the stand-out performance of Q1, our top-line for first half of the year grew by 25% YoY. Margin expansion was supported by strong growth in exports and judicious price revisions.

We are also progressing well on our long-term strategic agenda of focusing on sustainable value creation across B2B and B2C businesses through project LEAP. Strong domestic economy with structural reforms focused on infrastructure development augurs well for most of our product categories. We remain committed to achieving Rs 200 billion sales by FY26 and make Polycab a future ready organization

Polycab India is the largest manufacturer of wires and cables in India and fast growing player in the Fast Moving Electrical Goods (FMEG) space. The group is also in the business of engineering, procurement and construction (EPC) projects.

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