Polycab India's June quarter reflects deep impact of Covid-19 lockdown

Valuation discount to peers and recovery in certain pockets bode well

The nationwide lockdown took a heavy toll on wires and cables major Polycab India results in the June quarter (Q1) of financial year 2020-21 (FY21) after the first 45 days of the quarter saw no major sales.

Sales in the quarter declined 50 per cent year-on-year (YoY). Adverse operating leverage meant that Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin declined 571 basis points (bp) to 5.8 per cent and profit before tax at Rs 391 crore plunged by 80 per cent YoY.

Sales of the wires and cables segment, which contributes 80 per cent to top line and where Polycab