Polycab slides as Q1 PAT drops marginally to Rs 402 cr in FY25

Polycab India declined 1.13% to Rs 6,550.25 after the company's consolidated net profit fell marginally to Rs 401.61 crore in Q1 FY25 as against with Rs 403.16 crore posted in Q1 FY24.

Revenue from operations stood at Rs 4,698.03 crore in Q1 FY25, up 20.79% as against with Rs 3,889.38 crore posted in Q1 FY24, the growth in revenue was on the back of steady growth in W&C business, supported by strong growth in the EPC business and a seasonally robust performance in the FMEG business.

Profit before tax was at Rs 533.37 crore in Q1 FY25, marginally grew 0.54% from Rs 530.49 crore reported in Q1 FY24.

 

EBITDA jumped 6.34% YoY to Rs 583.40 crore in the quarter ended 30 June 2024. EBITDA margin contracted to 12.4% in Q1 FY25 as against 14.1% in Q1 FY24, adversely impacted by a shift in business mix towards segments with lower margins. Specifically, the contribution from its higher-margin international business and domestic distribution business declined, while that from lower-margin EPC business increased.

On segmental front, wires & cables business revenue grew by 11% YoY to Rs 3857.2 crore in Q1 FY25, significant fluctuations in commodity prices sharply impacted demand dynamics in channel sales in later part of the quarter, thereby mitigating the potential benefits derived from elevated average commodity prices. Domestically, the institutional business outpaced the distribution business, while growth in cables continued to outperform that in wires.

Revenue from international operations de-grew during the quarter, contributing 5.3% of the Companys consolidated revenue for the quarter. EBIT margins for the quarter were 12.6%, adversely impacted by lower contributions from the higher-margin international and the domestic distribution businesses.

FMEG business registered a growth of 21% YoY, driven by strong sales in fans amid heatwave in several parts of the country. The switches & switchgears and conduit pipes & fittings segments demonstrated robust growth, bolstered by strong real estate demand, challenges persisted in the lights & luminaires segment, which continued to see pricing erosion at an industry level.

Other businesses, largely comprising of the EPC business, registered a strong growth of 292% YoY during the quarter to Rs 481.50 crore, on the back of robust execution of the EPC order book. Contribution from this business is expected to be in mid-to-high single digits to the companys consolidated revenue going forward.

As of 30 June 2024, net cash position improved to Rs 1,638.4 crore against Rs 1,013.2 crore in the previous quarter.

Inder T. Jaisinghani, chairman and managing director (MD), Polycab India, said: We have started the financial year on a strong footing, achieving our highest-ever first-quarter revenues, despite significant commodity price volatility affecting channel sales in the later part of the quarter, which underscores our exceptional execution capabilities and adaptability in a changing market environment.

The strong domestic economy, bolstered by structural reforms aimed at infrastructure development, provides an advantageous backdrop for the growth of our various product categories. As we anticipate continued robust demand, we are fully prepared to leverage these significant opportunities and drive sustained growth.

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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