Polycab India tumbles after muted Q3 results

Polycab India fell 4.43% to Rs 2563.30 after the company's consolidated net profit rose 1.38% to Rs 248.40 crore on 22.78% increase in net sales to Rs 3,371.99 crore in Q3 December 2021 over Q3 December 2020.

On a consolidated basis, the company's profit before tax fell 2.03% to Rs 324.68 crore in Q3FY22 over Q3FY21. EBITDA stood at Rs 362 crore in Q3FY22, up 3% YoY.

EBITDA margin continued to improve sequentially by 100bps to 10.7% led by price hikes and better operating leverage, partly offset by input cost pressures and higher A&P spends. PAT margin improved to 7.4% against previous quarter. PAT grew 1% YoY.

Total expenses jumped 25.38% to Rs 3,069.22 with cost of materials consumed rising 38.66% to Rs 2,549.33 crore during the period under review.

The company's wires and cables business grew 24% on YoY basis to Rs 2967.90 crore in Q3FY22 from Rs 2402.3 crore in Q3FY21. FMEG business grew 11% YoY to Rs 340.4 crore in Q3FY22 from Rs 305.5 crore in Q3FY21 enduring the challenging market environment and a stronger base.

As of 31 December 2021, net cash position stood at Rs 670 crore. Debt to Equity decreased to 0.02x.

Commenting on the performance, Inder T. Jaisinghani, chairman and managing director, Polycab India, said: "We saw the momentum continue in 3Q despite a challenging business environment. We recorded the highest quarterly top-line in the history of the company for the second consecutive quarter which substantiates our strategy to be agile, focus on robust execution and consistently deliver the best quality of products to our customers. We have revitalised our demand generation capabilities and Go-To-Market strategy with greater emphasis on Emerging India clusters and new age channels. We have also commenced work on developing a robust ESG framework that will align us to the best of global standards and serve as guiding principles for sustainable business practices."

Polycab India is India's largest manufacturer of wires and cables. Its business operations span across India through 23 manufacturing facilities, 20+ offices and 50+ warehouses.

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