Polycab Q3 Results Review - Strong Quarter Aided By Margin Expansion; Enters High-Voltage Cables: Nirmal Bang

Despite a high base, softening commodity prices, a burgeoning inflation, Polycab India reported its highest-ever third quarter.

<div class="paragraphs"><p>Polycab India wires. (Source: Company Website)</p></div>
Polycab India wires. (Source: Company Website)

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Nirmal Bang Report

Despite a high base, softening commodity prices and a burgeoning inflation, Polycab India Ltd. reported its highest-ever third quarter topline of Rs 37.2 billion for Q3 FY23, up 10.2% YoY (2%/5.5% above our/consensus estimates) on the back of healthy volume growth in wires and cables business.

Topline was above our/consensus estimates by 2%/5.5%. While the wires and cables segment’s revenue grew by 11.4% YoY to Rs 33.4 billion (87.7% of total sales), the fast moving electrical goods segment’s revenue was flat YoY at Rs 3.4 billion (9% of total sales).

Gross margin expanded by 310 bps YoY to 25.7%. Ebitda jumped by 39.6% YoY to Rs 5 billion. Ebitda margin expanded by 290 bps YoY to 13.6% (160 bps/190 bps above our/consensus estimate), led by strong growth in exports, better operating leverage and judicious price revisions.

Polycab plans to enter the high voltage/extra high voltage cables segment and will set up a state-of-the-art EHV facility for the same. The company has set a topline target of Rs 200 billion by FY26-end under project LEAP.

While outlook for the wires and cables segment remains strong, we expect FMEG segment sales to pick up in FY24 post distribution revamp.

Click on the attachment to read the full report:

Nirmal Bang Polycab India- Q3FY23 Result Update-.pdf
Polycab Results Review - Strong Cables, Wires Volumes Drive Q3; FMEG To Revive In FY24: Systematix


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