Polycab India Q4 Results Review - Yet Again Strong Performance, Led By Export: Prabhudas Lilladher

Prabhudas Lilladher Report

Polycab India Ltd. reported healthy revenue growth of 16%/9% YoY in FY23/Q4 FY23, despite high base and lower commodity prices on the back of healthy volume growth in cables business.

Profitability (52%/32% in FY23/Q4 FY23) was largely led by volume growth and improvement in margins by 270 basis points/200 bps through judicious price revisions and favorable business mix.

Polycab aims to achieve Rs 200 billion revenue by FY26E under Project LEAP given-

1. sustained growth from infrastructure/real estate/construction activities,

2. focus on business-to-consumer through deepening reach and premiumisation of product portfolio,

3. continued go-to-market expansion and

4. gains from shift in consumer demand from unorganised to organised sector.

We expect 14.1%/14.8% sales/profit after tax compound annual growth rate over FY23-25, on back of healthy domestic demand environment supported by government measures and revival in private capex and strong traction in export revenue with increase in international coverage.

Accordingly we increase our FY24/FY25 earnings estimate by 2.7%/3.8% to mainly reflect upward revision in top-line growth assumption and margin improvement with product mix.

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