Polycab Q2 Results: Numbers beat estimates across parameters, margin contraction less than feared

Polycab India Ltd., the wires and cables company, reported its September quarter results on Thursday, October 15, which were ahead of expectations across parameters.

The company's net profit stood at ₹977 crore at the end of the September quarter, a growth of 42.6% from the same quarter last year, and ahead of the CNBC-TV18 poll expectation of ₹821 crore.

Revenue for the period grew by nearly 53% on a year-on-year basis to ₹9,899 crore. The topline figure was also higher than the CNBC-TV18 poll expectation of ₹8,889 crore. The company attributed the topline growth to robust execution across both wires & cables, and the FMCG business.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹1,423 crore, higher than the ₹1,221 crore projected in the CNBC-TV18 poll. That's a growth of 39.4% from the year-ago quarter.

EBITDA margin narrowed by 150 basis points from the same quarter last year to 14.37% from 15.8% last year. However, the margin contraction was less than what the street had feared as the CNBC-TV18 poll had pegged the figure to be 13.7%.

How Did Polycab's Various Businesses Fare In Q2?

Polycab's Wires & Cables business saw revenue growth of 47% from last year, led by the domestic business, which grew by 50% from the year ago. Healthy demand across key end-user segments, sustained infrastructure activity and strong execution under Project Spring supported the division's growth.

The Wires segment continued to outperform the cables segment, while channel sales grew faster than the institutional sales.

Polycab's international business saw 17% year-on-year growth despite a challenging global macro environment.

The company's FMEG segment saw revenue more than double on a year-on-year basis, growing 124% led by strong demand across key product categories. Solar segment continued to grow multifold, and remains the largest contributor to the segment's topline. The EBIT margin of the FMEG business also surpassed the double-digit mark for the first time reaching the 10.1% figure.

EPC division saw 53% revenue growth during the quarter with margins of 7.2% led by a healthy order book, as per the company's post-earnings release.

Shares of Polycab India have plunged to the lows of the day, currently trading 2.6% lower after the results announcement at ₹8,129.5. The stock is currently under Stage 0 of the IRP resolution mechanism, which requires a 100% upfront margin to be traded. There are also concerns surrounding the stock's potential exclusion from the MSCI indices leading to outflows, as a result of the recent developments.

This is breaking news and will be updated with more.