POLYCAB Q3 FY26 earnings call.
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Revenue
₹7,636 Cr
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Revenue YoY
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EBITDA
Pending
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What the record says.
Polycab India delivered 46% YoY revenue growth in Q3 FY26 driven by exceptional 59% domestic wires and cables growth and 17% FMEG expansion. EBITDA grew 34% YoY to ₹6.3 billion with 12.7% margins (13% ex-gratuity one-off), while PAT hit a record ₹630 crore, up 36%. The 40% volume growth reflects robust government capex (up 28%), real estate recovery, and significant market share gains versus an estimated ~20% industry. Management strategically staggered copper price hikes (copper up 50% YoY, 21% sequentially) to protect volumes and channel relationships, accepting near-term margin compression. Working capital extended to 27 days on inventory build for Q4 demand. FMEG turned profitable for the 4th consecutive quarter with solar growing 2x. Management expects Q4 to be strong and margins to recover as price hikes (75-80% of commodity inflation already taken) take effect. Key risks: US tariff headwinds impacting exports (down to 6% of revenue from 8.3% YoY), potential Q4 destocking if channel inventory normalizes, and sustained commodity inflation requiring further price pass-through.
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Guidance to track
- Working capital cycle expected to normalize from 27 days to long-term range of 50-55 days in coming quarters as Q4 demand materializes and inventory levels adjust.
- Management expressed optimism for Q4 being another strong quarter, citing peak execution season, sustained government and private capex momentum, and strong channel activity.
- Targeting 1.5-2x industry growth and EBITDA margins of 8-10% by FY30, with profitability expected to expand as the business scales.
- Investing ₹12-16 billion annually through FY30 as per Project Spring guidance; 9-month FY26 capex at ₹10.9 billion.
Risks flagged
- Export growth was muted at 5% YoY due to US tariff-related uncertainties. Export contribution declined to 6% of consolidated revenue from 8.3% a year ago. Management acknowledged this as a global overhang impacting all exporters.
- Copper prices rose 50% YoY and 21% sequentially in Q3. Management took a strategic call to pass on only 75-80% of price increases in a staggered manner to protect volumes, accepting near-term margin compression. Full recovery may take 1-2 quarters.
- Channel inventory for wires stood at 40-45 days vs normal 30 days, representing 10-15 days of additional stocking. Analyst raised concern about potential Q4 headwinds if destocking occurs. Management downplayed this risk citing strong fundamental demand.
- Institutional sales (30% of cable demand) outpaced channel sales this quarter, and wire growth outpaced cables—both lower-margin segments vs historical mixes. Export contribution also declined, all creating structural margin headwinds beyond commodity factors.
Key quotes
- The major reason here is the rise in commodity prices... We've been revising the prices but not all of it has been passed off. So it takes time to pass on these rise in input cost prices.
- What we've been able to achieve through this staggered passing on—our cables and wire segment has grown 35% YoY on a base where we are operating at 2x of the industry. This has resulted in improvement of loyalty of those customers with us.
- We don't see scenarios of inventory gains or inventory losses just because we price it at a future date. The higher inventory that we are maintaining is because we are anticipating good demand for Q4.
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