Polycab Results Review - Strong Cables, Wires Volumes Drive Q3; FMEG To Revive In FY24: Systematix
Management believes strong traction in the domestic cables and wires business would sustain.
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Systematix Research Report
Polycab India Ltd.’s robust Q3 FY23 performance (revenue up 10% YoY and 11% QoQ, 13.6% Ebitda margin) was driven by strong uptick in cables and wires volumes (up 18% YoY, led by domestic), channel rejig and margins (on richer mix towards wires, and operating leverage (operating leverage) benefits).
Management believes strong traction in the domestic cables and wires business would sustain, and subdued exports (Rs 2.2 billion revenue, ~6% mix in Q3) would revive to 8-10% of revenue on strong order book.
Considering the Rs 4-5 billion market opportunity by FY26, Polycab plans to enter extra high voltage cables segment (plant likely to be operational in FY25) in technical collaboration with Brook Cables, a Swiss company.
The fast moving electrical goods business (revenue flat YoY, Rs 24 million Ebit loss in Q3) too is expected to rebound in FY24, as the realignment in distribution strategy would get completed in FY23.
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