Polycab India Limited

Polycab India Limited delivered a strong Q1 FY27, with consolidated revenues growing 39% year-on-year. The company's EBITDA increased by 32% year-on-year, achieving a margin of 13.8%, which reflects an improvement of approximately 70 basis points sequentially. Profit After Tax (PAT) reached its highest ever quarterly figure of INR 796.7 crores, representing a 33% year-on-year growth, with a PAT margin of 9.7%. This robust performance was driven by favorable demand conditions and strategic investments.

The Wires & Cables segment maintained strong momentum, registering a healthy 39% year-on-year growth during the quarter. Within this, the domestic Wires & Cables business delivered an impressive 43% year-on-year growth, supported by robust market demand and effective execution across key channels. Wires grew faster than cables, and channel sales outperformed institutional sales. The segment's EBIT margins stood at 13.3%, consistent with the medium- to long-term guidance of 11% to 13%.

The FMEG segment delivered another outstanding quarter, recording 71% year-on-year growth, marking its tenth consecutive quarter of outperforming industry growth rates. The solar business, the largest category within FMEG, continued to be the primary growth engine, achieving more than twofold year-on-year growth. EBIT margins for FMEG reached 8%, aligning with the Project Spring target of 8% to 10% EBITDA margins by FY2030, driven by operating leverage and a richer product portfolio with premium mix reaching 25%.

The EPC business reported revenues of INR 307.7 crores during Q1 FY27, reflecting an 11% year-on-year decline, primarily due to the timing and execution cycles of projects. Despite the lower revenue base, profitability remained healthy at INR 33.8 crores, translating into a margin of 11%. The combined order book for Bharat Net and RDSS projects stands at INR 10,900 crores, with INR 4,500 crores for Bharat Net's new infrastructure execution expected over three years.

The average working capital cycle improved significantly to 15 days in Q1 FY27, aided by a temporary increase in payable days due to the use of letters of credit for raw material procurement. Management expects this cycle to normalize to its long-term operating range of 45 to 50 days. Capital expenditure during the quarter amounted to INR 320 crores, reflecting the company's continued commitment to building capacity and strengthening future growth drivers. The company maintains a strong net cash position of INR 3,990 crores.

Polycab remains optimistic about the Indian economy's structural growth story, driven by robust domestic demand, public investment, and healthy credit expansion. Significant opportunities are identified in the data center market, estimated at INR 20,000-25,000 crores over 6-8 years, and the Transmission & Distribution (T&D) sector, with transmission line capacity additions projected to increase to over 20,000 circuit kilometers annually. The company aims to grow at 1.5x the market growth rate.

The global macroeconomic landscape, influenced by geopolitical developments, continues to cause volatility in raw material prices. While oil prices have moderated, copper and aluminum prices plummeted in June. This price movement led to destocking by channels, as stocking typically occurs when prices rise and destocking when they fall. This temporary channel behavior impacted the working capital cycle and highlights the fluid nature of the market.