Polycab India delivers highest ever quarterly and half-yearly revenues

Polycab India Limited has reported its highest-ever revenues for the second quarter and half-year ended September 30, 2024, citing robust demand and strategic execution as the key drivers. The company’s revenue for Q2 FY25 rose 30% year-on-year to ₹54,984 million, while the half-year revenue surpassed ₹100 billion for the first time in its history.

Polycab’s growth trajectory, according to its Chairman and Managing Director, Inder T. Jaisinghani, is bolstered by a surge in market demand, increased government spending, and private sector investments. He added that their focus on operational excellence and leveraging emerging opportunities has positioned the company to maintain its upward momentum.

Strong Performance Across Business Segments

The company’s wires and cables business, a significant revenue contributor, saw a 23% growth year-on-year in Q2, driven by favourable commodity prices and high demand. The institutional business within this segment outpaced the distribution sector, while international markets reported a 36% quarter-on-quarter increase, contributing over 6% to the overall revenue.

However, Polycab acknowledged that the quarter’s EBIT margins were slightly impacted by competitive pressures and reduced contributions from higher-margin domestic segments. The company’s FMEG (Fast Moving Electrical Goods) business, meanwhile, recorded an 18% year-on-year growth, with notable success in expanding channels and executing influencer management programs.

Polycab’s Strategic Expansion: Leveraging EPC and International Markets

Polycab’s other businesses, particularly the EPC (Engineering, Procurement, and Construction) segment, also performed exceptionally well. The segment registered an astounding 241% growth year-on-year in Q2, indicating robust execution of its order book. The company anticipates that this business will continue to contribute significantly to its consolidated revenue going forward.

The company’s expansion into international markets has yielded promising results, with global operations growing significantly and contributing meaningfully to the company’s topline. As of the end of September 2024, Polycab’s net cash position improved to ₹24.3 billion, up from ₹15.3 billion in the same period last year, highlighting its strong financial health.

Expert Opinion: Industry Analysts on Polycab’s Prospects

Analysts point out that Polycab’s diverse business model, combined with its aggressive expansion in both domestic and international markets, has set the foundation for sustained growth. The company’s strategy of bolstering its presence in the high-margin institutional segment, while simultaneously expanding its international footprint, is seen as a balanced approach to mitigate competitive pressures.

The upgraded rating by CRISIL to “CRISIL AAA/Stable” further strengthens Polycab’s position. Experts believe that this reflects confidence in the company’s financial stability and its capability to capitalize on upcoming market opportunities.

Financial Outlook: Navigating Competition and Margin Pressures

Despite strong revenue growth, Polycab’s EBITDA margin for Q2 FY25 stood at 11.5%, slightly lower due to intense competition in the wires and cables sector and higher expenditures in the FMEG segment. Polycab also highlighted an increase in advertising and promotion costs, as well as employee-related expenses, as factors contributing to the margin dip.

Looking ahead, Polycab expects continued growth supported by the Indian government’s infrastructure initiatives and increased private investments. With a robust order pipeline, the company’s management is optimistic about sustaining the growth momentum while navigating the competitive landscape.