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Informist, Tuesday, May 6, 2025

By Arya S. Biju

MUMBAI – Electrical equipment manufacturer Polycab India Ltd. reported robust earnings for the March quarter with a double-digit on-year rise in both top line and bottom line, driven by strong growth across all verticals. The company's top line for the quarter was driven by continued growth in the wires and cables segment, improved growth in the fast-moving electrical goods segment that turned profitable after reporting losses in the last 10 quarters, and growth in the engineering, procurement, and construction vertical. The March quarter also saw the highest top line and bottom line since the March quarter of 2018, as per data available with Informist.

The company's consolidated net profit for the quarter grew over 33% on year to INR 7.27 billion, beating analysts' estimate of INR 6.29 billion. This was the highest on-year growth in net profit in the last six quarters. The consolidated revenue for the quarter rose nearly 25% on year to INR 69.86 billion, the highest on-year growth in the last four quarters. Analysts had expected the company to report consolidated revenue of INR 66.92 billion for the March quarter.

Shares of Polycab India, which were trading lower before the announcement of the results, rose 1.6% after the announcement and were at INR 5,948 on the National Stock Exchange at 1330 IST. They eventually closed at INR 5906.00, almost 2% up from Monday's close.

For the financial year ended Mar. 31, the company reported a consolidated net profit of INR 20.20 billion, up over 13% on year. Its consolidated revenue for the period rose over 24% on year to INR 224.08 billion. 

"With a sharpened strategic focus, robust fundamentals, and a culture of innovation and excellence, we are poised to build on this momentum and shape the next phase of Polycab's growth journey, under Project Spring, with confidence and purpose," Chairman and Managing Director Inder T. Jaisinghani said in a press release. Project Spring, the five-year guidance till FY30, was announced by the company in the December quarter. Under this, the company aims to grow its wires and cables business at around 1.5 times the market growth, with earnings before interest, tax, depreciation, and amortisation margins of 11-13% in the next five years. It also expects the fast-moving electrical goods segment to grow 1.5-2 times the industry growth rate with an EBITDA margin of 8-10%. 

The company's total expenses in the March quarter rose over 23% on year to INR 60.73 billion, driven by a rise of more than 24% on year in raw material costs to INR 43.99 billion. The cost of materials consumed accounted for over 72% of the company's total expenses in the reporting quarter. Its other expenses for the quarter rose over 18% on year to INR 4.11 billion, and its project buyouts and subcontracting cost rose over 33% on year to INR 3.92 billion.

Polycab India's EBITDA for the latest quarter rose 35% on year to INR 10.25 billion, beating analysts' estimate of INR 9.33 billion. Its EBITDA margin for the quarter expanded 110 basis points on year to 14.7%, driven by a profitable turnaround in the "fast-moving electrical goods" business and stronger margins in the engineering, procurement, and construction segment off a lower base, the company said in a press release. Its net profit margin for the quarter improved 60 bps on year and 160 bps sequentially to 10.5%. For FY25, the company reported an EBITDA of INR 29.60 billion, up 19% on year. Its EBITDA margin for the period, however, contracted to 13.2% from 13.8% a year ago.

SEGMENTAL PERFORMANCE

Wires and cables, Polycab India's largest segment, reported a consolidated revenue of INR 60.19 billion for the March quarter, up over 22% on year. This was on the back of increased government spending, improved project execution, continued strength in real estate, and a rise in commodity prices, the company said in an investor presentation. Domestic business in this segment grew 27% on year in the latest quarter, with growth in cables outpacing wires. International business in the segment, on the other hand, declined 24% on year due to the rollover of a large order into the next quarter, the company said. 

Polycab India expects a strong rebound in the international business of wires and cables in the financial year 2025-26 (Apr-Mar), supported by a robust order book and a favourable demand environment across key markets. The earnings before interest and tax margin of the wires and cables segment improved 140 bps sequentially to 15.1% in the reporting quarter, driven by operating leverage and a favourable product mix, although this was partially offset by the lower contribution from the international business. The company said it also saw healthy traction in both channel and institutional business.

In the fast-moving electrical goods segment, the company reported a consolidated revenue of INR 4.76 billion, up nearly 33% on year, with all product categories maintaining robust growth trajectory. The fans segment grew in the reporting quarter despite a delayed summer, reflecting the effectiveness of its strategic initiatives and focus on premiumisation, the company said. The lights and luminaires business sustained its momentum from the December quarter, achieving strong volume and value growth, amidst continuing pricing deflation. Switchgears, conduit pipes and fittings, and switches also posted healthy growth, supported by steady demand from the real estate sector. Solar products grew nearly 2.5 times on year in the March quarter. 

The fast-moving electrical goods business of the company reported a consolidated net profit of INR 19.15 million for the March quarter, as against a net loss of INR 459.06 million a year ago. The company has been reporting losses in the segment for the previous 10 quarters. The segment's EBIT for the quarter was INR 23.00 million, compared to an EBIT loss of INR 458.00 million in the year-ago quarter. The segment's EBIT margin for the quarter was 0.5%, up from a negative EBIT margin of 3% sequentially.

Polycab India's consolidated revenue from the engineering, procurement, and construction vertical grew nearly 47% on year to INR 6.03 billion, driven by effective execution of the revamped distribution system scheme order book. The company started reporting revenue from its engineering, procurement, and construction business as a separate segment in the quarter gone by. Previously, it was included in other segments. The segment's EBIT margin for the quarter improved to 9.4%, from 8.7% a quarter ago.

Along with the March quarter earnings, the company announced a dividend of INR 35.00 per share for FY25. Its board also approved the merger of its wholly-owned subsidiary, Uniglobus Electricals and Electronics Pvt. Ltd., with the parent company. Uniglobus manufactures and sells electrical goods such as luminaires and light-emitting-diode control gears from lower to higher wattage, including dimmable and network-operated drivers.  End

Edited by Avishek Dutta and Rajeev Pai

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