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Dolat Capital Report
Polycab India Ltd. posted revenue growth of 47.5% in Q1 FY23, despite subdued retail demand in June 2022, as dealers resorted to inventory destocking owing to significant correction in commodity prices.
With stability in prices in one to two months and upcoming festive season, inventory levels are expected to normalise, which will support demand revival in H2 FY23.
Polycab's wires and cables segment grew 47.9% in Q1 (three year compound annual growth rate of 14%) led by ~32% YoY volume growth and ~15% pricing actions. Notably, volumes also surpassed pre-pandemic levels in Q1.
Ebitda margin performance (up 400 basis points to 11.4%) was encouraging despite volatility in metal prices, supported by calibrated price hikes and better operating leverage.
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