Polycab India · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
Transition to distributor-led model in the US is taking longer than initially guided (previously mentioned 3-5 quarters). Management acknowledges it will take several more quarters to stabilize with freight costs also elevated.
Operating cash flow was negative INR 200 crore despite INR 450+ crore cash profit, driven by higher finished goods inventory and increased acceptances. Working capital at 64 days above comfortable 40-55 day range.
Sharp volatility in copper prices (15% up mid-March to mid-April, 11% down mid-April to mid-May, 12% down mid-May to mid-June) caused channel destocking in June, impacting sales and margins. Working capital tied up in inventory.
No further update on income tax issue since previous calls; no demand notice or order received as of call date. Market awaits resolution which could impact financials.
