Polycab India share extends fall post Q3 results, down 12% in 2 days

Demand for cables was healthy, however, downward trend in copper prices and high channel inventory of wires at the beginning of the quarter led to slowdown in the wires business, the company said

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Polycab India share price: Shares of Polycab India slipped 9 per cent to Rs 5,986.25 on the BSE in Wednesday’s intra-day trade, extending its previous day’s decline on profit booking, after the company reported a good set of numbers for the quarter ended December 2024 (Q3FY25). 

 

In two days, the stock of electrical cables manufacturer plunged 12 per cent. It has corrected 21 per cent from its 52-week high level of Rs 7,607 touched on October 15, 2024. 

 

At 02:18 PM, Polycab erased its partial intra-day losses and was down 5 per cent at Rs 6,215 on the BSE. In comparison, the BSE Sensex was up 0.37 per cent at 76,117.

 

In Q3FY25, Polycab’s revenues grew 20 per cent year-on-year (Y-o-Y) to register its highest ever third quarterly revenue at Rs 5,226 crore, on the back of robust growth across all business segments. Profit after tax grew 9.6 per cent Y-o-Y at Rs 464.3 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) rose 26.4 per cent Y-o-Y at Rs 719.90 crore; margins improved 70 bps Y-o-Y at 13.8 per cent.   ALS READ: Polycab India Q3 results: Profit rises 10.8% at Rs 457 cr, revenue up 20%

 

The margins improvement is on the back of normalisation in Wires and Cables (W&C) margins and lower losses in the fast moving electric goods (FMEG) business, partly offset by moderation in EPC business margins

 

Polycab said the W&C segment recorded a growth of 12 per cent Y-o-Y for the quarter. Demand for cables was healthy, however, a downward trend in copper prices and high channel inventory of wires at the beginning of the quarter led to slowdown in the wires business, the company said.

 

The FMEG business registered a strong 45 per cent Y-o-Y growth, albeit on a lower base. Effective execution of the company’s strategic roadmap is translating into sustained revenue expansion, Polycab said.

 

Meanwhile, the management said the Global W&C Market is estimated to reach $410 billion by FY30, growing at a compound annual growth rate (CAGR) of 7.5 per cent. Largest importing geographies in the global W&C market are USA, Germany, Mexico, UK and France.

 

On guidance, Polycab India expects around 1.5 times of market growth in core segments i.e. W&C in the next five years. The segment’s Ebitda will be in the range of 11 per cent to 13 per cent during the period, the company said. The FMEG business is likely to grow between 1.5X to 2X, with Ebitda in the range of 8 per cent to 10 per cent, in the next five years.