Polycab: Healthy growth in Q3 courtesy consumer demand, distribution expansion, better product mix and price hikes, says ICICI Securities

ICICI Securities highlights that Polycab’s consolidated revenue increased by 12% YoY at Rs 2799 cr led by 11% YoY growth in the wires & cables business to Rs 2407 cr. Business from distribution channels saw healthy double -digit growth however institutional business continues to face headwinds. On the FEMG front, revenues were up by 41% YoY at Rs 306 cr on the back of buoyant consumer demand, distribution expansion, better product mix and price hikes.
 
The gross margin declined by 318 bps YoY largely on account of delay in passing of higher raw material prices. However, EBITDA margin was almost flat at 13.4% on a YoY basis mainly due to significant savings in other operating costs (due to improved operating leverage). PAT came in at Rs 264 cr up by 19% YoY supported by higher other income during Q3 FY21.
 
Management of Polycab said that the company sawcw a great all-round performance in Q3 amidst lingering challenges. Business trends continue to improve and demand for B2C products remains buoyant with improving consumer sentiment. Accordingly, the top line has bounced back to growth along with considerable progress in return ratios, cash flow, financial position, distribution expansion and strategic initiatives. The results demonstrate the durability of our business model as well as our strong execution capability. Polycab’s relentless focus on providing quality solutions to customers along with strong organisation capabilities will augment Polycabs stature in the ‘Electricals’ ecosystem and provide a long pathway for profitable growth.

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About Polycab:

Polycab is a leading Electricals brand with over Rs 88 billion revenue. PIL is the largest manufacturer of Wires and Cables in India and a fast-growing player in the FMEG space. Polycab manufactures and sells various types of cables, wires, electric fans, LED lighting and luminaires, switches and switchgears, solar products, pumps and conduits and accessories. Polycab caters to various public and private institutions across a diverse set of industries, as well as retail customers through its B2C business. PIL has a strong Pan-India distribution network of over 4,000+ authorized dealers and distributors who in turn cater to over 151,000+ retail outlets. Business operations are managed through a corporate office, 3 regional offices, 20 local offices across India and 30 warehouses located across the nation. Polycab owns 25 manufacturing facilities, including a joint venture, located across the states of Gujarat, Maharashtra, Uttarakhand, and District of Daman. Polycab puts strong emphasis backward integration of its manufacturing process and building in-house research and development ‘R&D’ capabilities to adhere to various national and international quality certifications. PIL has also exported goods to over 40 countries in the past few years.