POLYCAB Q1 FY24 earnings call.
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Revenue
₹3,889 Cr
verified against source
Revenue YoY
42%
reported change
EBITDA
Pending
latest reported figure
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Actual signal trajectory
Where this quarter sits.
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What the record says.
Polycab India delivered its highest-ever Q1 revenue and PAT in Q1 FY24, with consolidated revenue growing 42% YoY driven by 50%-60% volume growth in wires and cables. EBITDA surged 77% YoY with margins expanding 280bps to 14.1%, while PAT jumped 81% to ₹402.8 crore. The wires and cables segment (89% of revenue) benefited from robust government infrastructure spending and improving private CapEx, with EBIT margins at 14.8% (+330bps YoY). International business grew 88% YoY contributing 8.9% of consolidated revenue, now present across 72 countries. FMEG segment remains a drag with negative EBIT margins despite 3% YoY growth, though management maintains its FY26 target of 10% EBITDA margin for the segment. Working capital increased temporarily due to anticipated demand and copper pre-procurement ahead of supplier maintenance shutdowns. Management targets ~₹600 crore annual CapEx and is recalibrating its INR 20,000 crore FY26 revenue guidance given faster-than-expected trajectory. Key risk: FMEG demand recovery may take another 1-2 quarters amid muted consumer sentiment.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects EBITDA margins to improve by approximately one percentage point from the current range of 11%-13% as operating leverage benefits from higher capacity utilization kick in.
- The company targets annualized CapEx of approximately ₹600 crore, including EHV factory setup, export facilities expansion, maintenance CapEx, and FMEG capacity investments.
- Management reiterated its commitment to achieving 10% EBITDA margin in the FMEG segment by fiscal 2026, with year-on-year improvement expected directionally each year.
- Given the faster-than-expected trajectory (reached ₹14,000 crore annualized revenue within two years of setting the target), management plans to recalibrate the FY2026 revenue guidance within 2-4 quarters.
Risks flagged
- Consumer demand in FMEG remains muted for the past 2-3 quarters, and management expects recovery to begin only from Q2-Q3 FY24 onwards. This continues to pressure the segment's path to profitability.
- Although management characterized the inventory increase as temporary (related to anticipated demand and copper pre-procurement ahead of supplier maintenance), the working capital cycle may take time to normalize to the 50-55 day target.
- The high growth percentages appear elevated due to soft Q1 FY23 performance when commodity prices declined sharply, affecting channel inventory destocking. Growth rates will normalize as comparisons become tougher.
- While management maintains hedging framework limits annual impact, quarterly margins vary based on commodity price movements. Any prolonged downward trend in copper/aluminum prices could pressure future pricing.
Key quotes
- This quarter's performance surpasses even our third quarter figures from last year's, a feat unprecedented in our history, highlighting the remarkable scale of our achievement.
- We are targeting to achieve about 10% of contribution through the international business of the overall top line. We are more or less very near to that target. We are operating somewhere in the range of 8%-10% over the past two to three quarters. What we have realized is that the international opportunity is quite large, and it might be possible that the contribution might increase.
- Within two years, we have reached to almost INR 14,000 crore of annualized revenue. We believe in next two, three, four quarters, we'd like to recalibrate that guidance and see whether we want to revisit a timeline of fiscal 2026 to achieve INR 20,000 crore.
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