Skip to content

    Polycab India Q1 FY26 earnings call

    POLYCAB
    Capital Goods·18 Jul 2025
    Management Summary

    Polycab India reported its highest-ever Q1 revenue and profitability in Q1 FY26, with consolidated revenue up 26% YoY and PAT up 49% YoY to ~₹6 billion. This strong performance was driven by the Wires and Cables business (31% YoY growth) and a profitable FMEG segment (18% YoY growth). The company maintains a strong balance sheet with ₹31 billion net cash and is on track with its capex plans, while navigating global uncertainties and specific market challenges like US tariffs and FMEG seasonality.

    Highlights

    5

    • Consolidated revenue grew 26% YoY, marking the highest-ever Q1 revenue in the Company's history.

    • EBITDA grew 47% YoY, significantly outpacing revenue growth, with margin expanding 210 bps to 14.5%.

    • PAT increased 49% YoY to ~₹6 billion, resulting in a PAT margin of 10.2% (up 170 bps).

    • Wires and Cables business delivered strong 31% YoY revenue growth, driven by over 25% volume growth and robust domestic demand.

    • FMEG business achieved its second consecutive profitable quarter, growing 18% YoY, with strong performance in solar products (more than 2x growth).

    Concerns

    4

    • EPC segment revenue declined 19% YoY to ₹3,474 million.

    • FMEG business faced seasonal headwinds from an early monsoon, impacting fan sales.

    • US tariffs create an overhang on export visibility in the near term, though India is currently in a beneficial position.

    • Working capital cycle temporarily impacted by increased payable days, expected to normalize to 50-55 days.

    What Changed3

    vs Q2 FY26

    Guidance items10 → 12 (+2)Risks discussed5 → 6 (+1)Q&A highlights8 → 6 (-2)

    Key financials

    Single quarter

    06 metrics
    1. 01Consolidated Revenue—+26%YoY
    2. 02EBITDA—+47%YoY
    3. 03EBITDA Margin14.5%
    4. 04PAT6,000 Mn+49%YoY
    5. 05PAT Margin10.2%

    Segment breakdown

    Wires and Cables
    31% Revenue Growth25% Volume Growth32% Domestic Revenue Growth24% International Revenue Growth5.2% International Revenue Contribution14.7% EBIT Margin
    FMEG
    18% Revenue Growth
    EPC
    3,474 Mn Revenue268 Mn Profitability7.7% Margin
    List

    Order Book

    high confidence

    Total Value

    ₹ 1,50,000 million

    as of 2025-06-30

    quantified

    Inflow this qtr

    ₹ 80,000 million

    Execution

    BharatNet order executable over next 3 years

    Composition

    BharatNet(project)
    ₹ 80,000 million53.0%
    RDSS(scheme)
    ₹ 38,000 million

    Pipeline

    qualified rfp

    New tenders opened for RDSS scheme, part 2 of phase 3 of BharatNet.

    "The open order book remains healthy, offering strong visibility for future growth, with significant wins in BharatNet and ongoing RDSS opportunities."

    Source:
    Prepared remarks

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹4,100 million this quarter · ₹12,000 million (annually through FY30) planned

    Liquidity

    Cash ₹31,000 million

    Company closed the quarter with a net cash position of ₹31 billion.

    Guidance & targets

    12
    CategoryTargetPriority
    Profitability
    Working Capital Cycle
    50-55 days
    		High
    Profitability
    FMEG EBITDA Margins
    8% to 10%
    		High
    Profitability
    W&C EBITDA Margins
    11% to 13%
    		High
    Profitability
    EPC Operating Margin
    high single digit
    		High
    Profitability
    BharatNet EPC Margin
    12% to 14%
    		High
    Profitability
    RDSS EPC Margin
    high single digit
    		High
    Marketing
    Advertising and Promotion Spends
    3-5% of B2C top-line
    		High
    Growth
    FMEG Business Growth
    1.5 to 2x of industry growth
    		High
    Growth
    FMEG Industry Growth
    double-digit growth
    		High
    Contribution
    EPC Business Contribution
    5% to 10% range
    		High
    Capex
    Annual Capex
    ₹1,200-1,600 crores
    		High
    Revenue
    EHV Cables Revenue Accrual
    meaningful revenue accrual
    		High

    What to watch in Q2 FY26

    5

    Working Capital Cycle Normalization

    coming quarters
    Current43 days
    Target50-55 days

    Why it matters

    Indicates efficiency in managing cash flows and operational liquidity.

    Our working capital cycle stood at 43 days in Q1 FY26, positively impacted by a temporary increase in payable days. We expect this to normalize and revert to a long-term steady range of 50 days to 55 days in the coming quarters⏳.

    Risks & concerns

    6
    RiskSeverity

    Global financial system volatility due to geopolitical shocks

    Recent Iran-Israel conflict caused immediate ripple effects on asset classes and oil prices, highlighting vulnerability. — Management acknowledged

    medium

    US tariffs impacting export visibility

    The tariff situation in the US creates an overhang for export visibility in the near term, despite India's beneficial position compared to other exporters. — Management acknowledged

    medium

    FMEG seasonal headwinds

    Early monsoon impacted the seasonal campaign cycle for fans, leading to muted sales in the segment. — Management acknowledged

    low

    Real estate sector moderation

    The real estate sector, while buoyant, shows some signs of moderation, though Tier 3-5 cities are seeing a pickup. — Management acknowledged

    low

    Lower operating margins from capacity expansion

    Investing heavily in capacity expansion is expected to have an impact on lower operating margins in the near to midterm. — Management acknowledged

    medium

    Increased A&P spends impacting FMEG profitability

    Continuous increase in A&P spends for the B2C business (including wires) will impact the profitability of the FMEG segment. — Management acknowledged

    medium

    Q&A highlights

    6

    “When you look at the longer term, there are multiple variables that you have to look at and which will impact your profitability. While obviously, the cables and wires mix, if it goes in favor of wires, that can help your profitability. As the exports mix increases, that also helps the profitability. But parallelly, when you are investing a lot in terms of capacity expansion, that is bound to have an impact in terms of lower operating margins in the near to midterm. So that will take a bit of a sheen off of the improvement in profitability that we might see because of the other two parameters.”

    Analyst questioned why margin guidance remains lower than current performance, leading to management explaining long-term variables like capacity expansion costs and increased A&P spends that could temper profitability.

    asked by Pulkit Patni

    3 min read6 chapters

    Detailed Narrative

    01

    Strong Q1 FY26 Performance Driven by Wires and Cables

    Polycab India delivered its highest-ever Q1 revenue and profitability in Q1 FY26. Consolidated revenue grew by a strong 26% YoY, while EBITDA saw a 47% YoY increase, leading to an EBITDA margin of 14.5%. PAT surged by 49% YoY to approximately ₹6 billion, with PAT margins improving by 170 basis points to 10.2%. This robust performance was primarily fueled by the Wires and Cables business, which recorded a 31% YoY revenue growth, supported by over 25% volume growth and strong domestic demand.

    02

    FMEG Business Achieves Second Consecutive Profitable Quarter

    The FMEG segment continued its positive trajectory, delivering an 18% YoY growth and achieving its second consecutive profitable quarter. This improvement was driven by strategic initiatives and a focus on premiumization, particularly evident in the lighting category (over 35% premium products) and solar products, which saw more than 2x growth. The company aims to grow FMEG at 1.5 to 2 times the industry growth and achieve EBITDA margins of 8-10% by FY30, despite seasonal headwinds from an early monsoon impacting fan sales.

    03

    EPC Segment Outlook and BharatNet Contribution

    The EPC segment experienced a 19% YoY revenue decline in Q1 FY26, reaching ₹3,474 million, with a profitability margin of 7.7%. However, the company holds a healthy open order book, including a significant ₹80 billion order from the BharatNet project, which is expected to accrue over the next three years with 12-14% EBITDA margins. Management expects EPC contribution to remain in the 5-10% range in the near to midterm, with quarterly variations due to project execution phases.

    04

    Strategic Pricing and Margin Expansion Drivers

    Margin expansion across the company was attributed to strategic pricing actions, operational efficiencies, and a favorable business mix. In Wires and Cables, stable copper prices allowed for swift pass-through without impacting profitability. The higher contribution from the more profitable Cables and Wires business, compared to EPC, also boosted overall company margins. In FMEG, gross margin expansion across product categories contributed to improved profitability.

    05

    Capital Expenditure and Working Capital Management

    Polycab spent ₹4.1 billion on capital expenditure in Q1 FY26, in line with its Project Spring guidance of investing ₹12-16 billion annually through FY30. The majority of this capex is allocated to the Cables and Wires business and backward integration, with no immediate incremental capex planned for FMEG. The working capital cycle stood at 43 days, temporarily impacted by increased payable days, but is expected to normalize📎 to a long-term range of 50-55 days in the coming quarters⏳. The company maintains a strong net cash position of ₹31 billion.

    06

    Export Market Dynamics and US Tariffs

    International business grew 24% YoY, contributing 5.2% to consolidated revenue. The US market, a significant contributor to exports, faces tariff-related overhangs, though India currently holds a beneficial position compared to other major exporters like China and Mexico. Management noted that while the US renewable market might see reduced investment, demand for other cable types (data centers, power infrastructure upgrades) will continue to drive export opportunities, particularly for low and medium voltage cables.

    This is an AI-generated summary of a publicly available earnings call transcript.