Shares of Polycab India Ltd, the leading wires and cables manufacturer, slipped to the day’s lows following the announcement of its September quarter earnings. Despite a strong revenue and margin performance, investor sentiment appeared cautious, pushing the stock 2% lower to ₹7,426.5, though it remains up 4% in the past month and year-to-date.
Revenue Growth Driven by Wires and Cables, FMEG Segment
Polycab reported revenue of ₹6,477 crore, marking a 17.8% increase from the same quarter last year. This came in line with a CNBC-TV18 poll projection of ₹6,474 crore, reflecting a strong performance in the wires and cables business, supported by growth in the FMEG (Fast Moving Electrical Goods) segment.
The wires and cables segment posted revenue of ₹5,691 crore, up 19% YoY, while the FMEG segment grew 13.7% to ₹4,521 crore. Brokerages, including Kotak, had expected FMEG growth of 15% and core wires and cables growth of 20%, showing Polycab’s performance was slightly below some estimates for FMEG but strong in cables.
EBITDA Surges, Margins Expand
Polycab’s EBITDA jumped 61% YoY to ₹1,021 crore, surpassing the CNBC-TV18 poll estimate of ₹915 crore. The EBITDA margin expanded over 400 basis points to 15.8%, compared with 11.5% last year and 14.1% forecasted. Management highlighted that strong margins in the wires and cables segment, coupled with a one-off EPC gain, contributed to sequential margin improvement.
EPC Segment Performance
The EPC business saw a 19% decline in revenue, but its EBIT increased 42% YoY, reflecting operational efficiency gains despite lower top-line contribution.
Market Reaction
Despite robust revenue and profit growth, Polycab shares fell to intraday lows, reflecting cautious investor sentiment amid the mixed performance across segments. Analysts suggest the strong core business and expanded margins provide a positive medium-term outlook, though EPC softness may weigh on sentiment in the near term.
