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Informist, Wednesday, May 7, 2025

By Arya S. Biju and Narayana Krishna

MUMBAI – Electrical equipment manufacturer Polycab India Ltd. does not expect any material impact from tariff measures by the US, the company's management said in a post-earnings analyst call. "Unlike many others, we are relatively insulated from global tariff actions, and we have acted decisively," Gandharv Tongia, Polycab India's executive director and chief financial officer, said. The company remains positive on its export business in the medium-to-long term, and is able to pass on any increase in costs due to tariffs to customers, Tongia said.

Polycab India said it expects more clarity on the impact of tariff measures on operations and demand in the US by June. As of now, the company does not expect any material change in demand from the region owing to tariff-related announcements. However, it expects a delay in projects already underway in the US with the end clients remaining uncertain about the macroeconomic environment.

The company expects to see material improvement in its export business every year and to meet its guidance for the financial year 2025-26 (Apr-Mar) to FY30. It has guided for over 10% revenue contribution from exports over the next five years compared to 6% in FY25. The company has a good order book in Europe and Australia, which it expects to service over FY26.

For the March quarter, the company's earnings before interest, taxes, depreciation, and amortisation margin improved to 14.7% from 13.8% in the previous quarter. The company attributed this improvement to operating leverage, a profitable turnaround in its fast-moving electrical goods business driven by sustained strategic investment, and improved margins in the engineering, procurement, and construction business, supported by a low base and better execution. The company had reported losses in the consumer electrical goods segment for the past 10 quarters.

As of Mar. 31, the value of the company's engineering, procurement, and construction order book was INR 70 billion. This included an agreement worth over INR 30 billion with Bharat Sanchar Nigam Ltd. to design, supply, construct, install, upgrade, operate, and maintain the BharatNet middle mile network in the Bihar telecom circle. It also included a revamped distribution system scheme order book of around INR 40 billion. With improved government spending, Polycab India expects to see strong growth in the engineering, procurement, and construction segment.

Wires and cables, Polycab India's largest segment, had reported a consolidated revenue of INR 60.19 billion for the March quarter, up over 22% on year. This was led by growth in both volume and value terms, the company said. Polycab India saw an on-year improvement of around the mid-teens in terms of domestic volume in the segment. Within the domestic business in this segment, the cables business outpaced wires year on year. Sequentially, however, the wires business grew faster than cables. The company expects an EBITDA margin of 11-13% in the segment in FY26.

Asked about pricing action taken in the wake of rising copper prices year-to-date, the company said that as far as the cables and wires segment is concerned, it passes on changes in commodity prices on a monthly basis. The company said it had passed on the increase in prices of copper and aluminium in the March quarter to end customers. The increase in product prices was in the mid-to-high single digit.

The company had seen an improvement in demand from the power industry in FY25, and expects this to continue in the future, Tongia said, adding that the transition to renewable energy sources is a big opportunity. Further, Polycab India plans to spend more on advertising in FY26, with more focus on digital media. In the March quarter, its advertisement and sales promotion expenses had fallen nearly 24% to INR 286.53 million.

Polycab India announced its March quarter earnings Tuesday, reporting a consolidated net profit of INR 7.27 billion, up over 33% on year. Its consolidated revenue for the quarter was INR 69.86 billion, up nearly 25% on year. The company's top line and bottom line were the highest since the March quarter of 2018, as per data available with Informist. Wednesday, shares of the company closed 0.3% lower at INR 5,886.50 on the National Stock Exchange.  End

Edited by Rajeev Pai

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