1 month ago
Shares of Polycab Ltd., the wires & cables manufacturing company, reported results for the January-March period, on Tuesday, May 6. The stock has surged to the day's high post the announcement.
Revenue for the quarter increased by 25% from the same quarter last year to ₹6,985.7 crore. A CNBC-TV18 poll, had expected revenue growth of 18% to ₹6,621 crore.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew by 34.7% from the same quarter last year to ₹1,025.7 crore. The EBITDA figure was higher than the CNBC-TV18 poll figure of ₹958 crore.
Polycab's margins expanded by 110 basis points from last year to 14.7%, marginally higher than the CNBC-TV18 poll of 14.5%. Net profit increased by 35% year-on-year to ₹727 crore, aided by strong topline growth.
Here's how Polycab fared during the quarter in its various business segments:
Wires & Cables segment grew by 22% from last year, driven by increased government spending, improved project execution, continued strength in real estate and an inflationary trend in commodity prices. Cables growth outpaced the wires business during the quarter. business saw a temporary decline due to rolling over of a large order into the next quarter.
The FMEG business grew by 33% during the quarter from last year with all product categories contributing to the growth. Switchgears, conduit pipes & fittings, and switches also saw healthy growth last year. Moreover, the FMEG business turned profitable during the quarter, its first, after ten quarters of strategic investments.
Polycab's EPC business saw growth of 47% from last year led by a robust execution of the RDSS order book.
Although Polycab did cross ₹22,000 crore in annual revenue as it had projected in the previous quarter, it has not shared any specific number for the current financial year.
The cables and wires space has been in the news ever since Aditya Birla Group's UltraTech announced a foray into the space, followed by the Adani Group. While the street fears the rising competitive intensity to hurt incumbents, the players like KEI Industries and others believe that the industry is big enough to accommodate more players.
The board of Polycab has also approved a dividend payout of ₹35 per share, which is the highest on record for the company. This has taken the company's dividend payout to 26.3% from 25.5% last year, and is in-line with the Project Spring goal of increasing the dividend payout to over 30% by FY30.
Shares of Polycab are trading with gains of 0.8% after the earnings announcement at ₹5,840. The stock, along with those of its peers KEI Industries and Finolex Cables, had seen a sharp surge on Monday, after the results reported by RR Kabel, as a result of which that stock had surged over 15% on Monday.
(With Inputs From Upasana Bhatt.)
