Earnings Outlook
Wires and cables segment to drive Polycab's consol sales
This story was originally published at 17:32 IST on 5 May 2025
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By Arya S. Biju
MUMBAI – Growth in both volume and value terms in the cables and wires segment, coupled with traction in the fast moving electrical goods segment, is expected to drive Polycab India Ltd.'s top line growth for the March quarter. Robust execution is also expected to help the electrical equipment manufacturer report a double-digit on-year rise in both top line and bottom line for the quarter. However, its margin, though seen up sequentially, is expected to decline on a year-on-year basis on a high base.
Polycab is expected to report a 15% on-year rise in its net profit for the March quarter at INR 6.29 billion, according to the average of the estimates of nine brokerages. Among them, Kotak Institutional Equities has the highest estimate of INR 6.52 billion for consolidated net profit while Anand Rathi Share and Stock Brokers Ltd. has the lowest estimate of INR 5.91 billion. This will be the company's third consecutive quarter of on-year growth in bottom line, after reporting a decline in the June quarter.
The consolidated revenue for the quarter is expected to rise nearly 20% on year to INR 66.92 billion, according to the estimates. The latest quarter will mark the 18th consecutive quarter of revenue growth for the company annually. Nirmal Bang Equities Pvt. Ltd. has the highest estimate of INR 69.86 billion for the company's top line for the quarter and Elara Securities (India) Pvt. Ltd. has the lowest at INR 64.53 billion.
The company's earnings before interest, tax, depreciation, and amortisation for the March quarter is expected to be INR 9.33 billion, according to the average of seven estimates. The company had reported EBITDA of INR 7.62 billion for the same quarter a year ago.
Revenue from Polycab's cables and wires segment is expected to grow over 18% on year, with a revival in the wires segment, Prabhudas Lilladher Pvt. Ltd. said in an earnings preview report. Revenue from the cables and wires segment contributed nearly 84% of the company's total revenue in the December quarter. Analysts expect demand for cables to have remained strong in the latest quarter, supported by government spending on infrastructure. The demand for wires, which was weak in the past quarters, is expected to have improveed in the March quarter driven by healthy channel stocking with copper prices moving up and improved real estate activity. Wires and cables companies are expected to have hiked prices 6-7% in the March quarter, brokerage Equirus Securities Pvt. Ltd.
Motilal Oswal expects the EBIT margin for the wires and cables segment to improve 50 basis points on a sequential basis. Kotak expects it to contract 50 bps on year but rise 115 bps on quarter after factoring in an adverse geographic mix, impact of currency fluctuations, and a higher base.
Revenue from the fast moving electrical goods segment is expected to grow 18.4-24.0% on year, estimates from four brokerages showed. Revenue from the segment contributed over 8% of the company's total revenue in the December quarter. Nuvama Institutional Equities expects revenue from the segment to grow over 20% on year, driven by growth in sales of fans. Analysts also expect the segmental EBIT loss to come down in the latest quarter led by scale benefit, a better product mix, and pricing actions. The company has been reporting losses in the fast moving electrical goods segment for the previous 10 quarters. For the December quarter, the company had reported a loss of INR 127.83 million for the segment.
Polycab will announce its March quarter earnings on Tuesday. Investors are expected to watch out for management commentary on the outlook for demand from domestic and export markets and an update on new capacity addition plans, Equirus Securities said. Management comments on the impact of the tariff uncertainties and the entry of UltraTech Cement and Adani Enterprises into the wires and cables space will also be monitored.
On Monday, shares of Polycab closed at INR 5,795 on the National Stock Exchange, up over 6%. The stock has fallen nearly 6% since the announcement of the company's December quarter earnings on Jan. 22 and nearly 24% from its all-time high of INR 7,605 hit on Oct. 15.
Following are the Jan-Mar earnings estimates for Polycab Ltd., based on reports from nine brokerages, in descending order of the estimate of net profit (in INR million):
Brokerage firm | Net sales | Net profit | EBITDA |
Kotak Institutional Equities | 65,051.00 | 6,523.00 | 9,598.00 |
Prabhudas Lilladher Pvt Ltd | 66,718.00 | 6,474.00 | 9,279.00 |
Motilal Oswal Financial Services Ltd | 67,513.00 | 6,447.00 | 9,611.00 |
Nirmal Bang Equities Pvt Ltd | 69,859.00 | 6,405.00 | 9,288.00 |
Elara Securities (India) Pvt Ltd | 64,526.00 | 6,398.00 | 9,175.00 |
Equirus Securities Pvt Ltd | 67,011.00 | 6,364.00 | 9,567.00 |
Sharekhan Ltd | 67,640.00 | 6,090.00 | |
Nuvama Wealth Management Ltd | 66,741.00 | 6,019.00 | 8,775.00 |
Anand Rathi Share and Stock Brokers Ltd | 67,265.00 | 5,907.00 | |
Average | 66,924.89 | 6,291.89 | 9327.57 |
End
Edited by Nishant Maher
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