Capitaline

Results 24-Oct-21

Analysis

Polycab India

Sales up 48% but net down 10% hit by 500 bps erosion in OPM

Net sales (including other operating income) of Polycab India for the quarter ended Sep 2021 has increased 48.03% to Rs 3128.83 crore. Operating profit margin has declined from 14.78% to 9.68%, leading to 3.08% decline in operating profit to Rs 302.85 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 62.73% to 72.25%. Purchase of finished goods cost fell from 8.21% to 4.78%. Employee cost decreased from 4.18% to 3.49%. Other expenses fell from 10.33% to 9.62%. Selling and administration expenses fell from 0.62% to 0.46%. Freight charges rose from 2.20% to 2.27%. Other direct service cost fell from 1.08% to 1.04%. Other income fell 19.36% to Rs 26.4 crore. PBIDT fell 4.62% to Rs 329.25 crore. Provision for interest fell 22.41% to Rs 8.83 crore. PBDT fell 4.02% to Rs 320.42 crore. Provision for depreciation rose 17.94% to Rs 53.78 crore. Profit before tax down 7.49% to Rs 266.64 crore. Share of profit/loss was 19.23% lower at Rs -0.31 crore. Provision for tax was expense of Rs 65.8 crore, compared to Rs 66.42 crore. Effective tax rate was 24.71% compared to 23.06%.Minority interest increased 160% to Rs 2.60 crore. Net profit attributable to owners of the company decreased 10.26% to Rs 197.93 crore.

Sales of Wires and Cables segment has gone up 43.86% to Rs 2,628.08 crore (accounting for 79.83% of total sales). Sales of FMEG segment has gone up 40.57% to Rs 342.93 crore (accounting for 10.42% of total sales). Sales of Others segment rose 33.98% to Rs 95.03 crore (accounting for 2.89% of total sales). Sales of Copper segment has gone up 73.54% to Rs 226.20 crore (accounting for 6.87% of total sales). Inter-segment sales rose Rs 134.17 crore to Rs 147.70 crore.

Profit before interest, tax and other unallocable items (PBIT) has slumped 8.72% to Rs 270.25 crore. PBIT of Wires and Cables segment fell 9.29% to Rs 230.51 crore (accounting for 85.30% of total PBIT). PBIT of FMEG segment fell 12.35% to Rs 17.20 crore (accounting for 6.37% of total PBIT). PBIT of Others segment rose 57.20% to Rs 15.74 crore (accounting for 5.83% of total PBIT). PBIT of Copper segment fell 44.84% to Rs 6.79 crore (accounting for 2.51% of total PBIT).

PBIT margin of Wires and Cables segment fell from 13.91% to 8.77%. PBIT margin of FMEG segment fell from 8.04% to 5.02%. PBIT margin of Others segment rose from 14.12% to 16.57%. PBIT margin of Copper segment fell from 9.44% to 3.00%. Overall PBIT margin fell from 13.03% to 8.21%.

Half-yearly performance

Net sales (including other operating income) of Polycab India has increased 62.10% to Rs 5009.35 crore. Operating profit margin has declined from 11.97% to 8.83%, leading to 19.53% rise in operating profit to Rs 442.19 crore. Other income fell 22.12% to Rs 51.69 crore. PBIDT rose 13.19% to Rs 493.88 crore. Provision for interest fell 24.17% to Rs 20.99 crore. PBDT rose 15.72% to Rs 472.89 crore. Provision for depreciation rose 17.85% to Rs 105.91 crore. Profit before tax grew 15.12% to Rs 366.98 crore. Share of profit/loss was 71.33% lower at Rs -2.45 crore. Provision for tax was debit of Rs 88.74 crore, compared to credit of Rs 12.05 crore. Effective tax rate was 24.34% compared to negative 3.68%. Minority interest increased 304.17% to Rs 3.88 crore. Net profit attributable to owners of the company decreased 19.59% to Rs 271.91 crore.

Sales of Wires and Cables segment has gone up 60.44% to Rs 4,255.03 crore (accounting for 81.06% of total sales). Sales of FMEG segment has gone up 40.09% to Rs 534.81 crore (accounting for 10.19% of total sales). Sales of Others segment rose 34.18% to Rs 166.79 crore (accounting for 3.18% of total sales). Sales of Copper segment has gone up 101.52% to Rs 292.86 crore (accounting for 5.58% of total sales). Inter-segment sales rose Rs 176.61 crore to Rs 211.69 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 16.62% to Rs 375.31 crore. PBIT of Wires and Cables segment rose 21.30% to Rs 337.86 crore (accounting for 90.02% of total PBIT). PBIT of FMEG segment fell 79.58% to Rs 2.87 crore (accounting for 0.77% of total PBIT). PBIT of Others segment rose 36.01% to Rs 23.37 crore (accounting for 6.23% of total PBIT). PBIT of Copper segment fell 7.00% to Rs 11.21 crore (accounting for 2.99% of total PBIT).

PBIT margin of Wires and Cables segment fell from 10.50% to 7.94%. PBIT margin of FMEG segment fell from 3.68% to 0.54%. PBIT margin of Others segment rose from 13.82% to 14.01%. PBIT margin of Copper segment fell from 8.29% to 3.83%. Overall PBIT margin fell from 9.74% to 7.15%.

Management comment

Commenting on the performance, Inder T. Jaisinghani, Chairman and Managing Director, Polycab India Limited, said: “We had a healthy Q2. Robust sales growth was underpinned by market share gains across categories. Given the strengthening macroeconomic fundamentals, we see a massive opportunity to spread our wings across B2B as well as B2C categories by leveraging on our strong brand equity and increased consumers affinity for our products. Structural reforms focussed on infrastructure development augurs well for most of our product categories. We are also in the process of building Polycab of the future. A company with robust governance practices, top talent, a strong business model, a customer centric culture and a purpose to serve the communities. We will strive to continue the path of profitable and sustainable growth and contribute to the success of all our stakeholders.”

Polycab India : Consolidated Results

	Quarter ended			Year to Date			Year ended
Particulars	202109	202009	Var.(%)	202109	202009	Var.(%)	202103	202003	Var.(%)
Net Sales (including other operating income)	3,128.83	2,113.68	48.03	5,009.35	3,090.28	62.10	8,926.54	8,829.96	1.09
OPM (%)	9.68	14.78	-510 bps	8.83	11.97	-314 bps	13.07	12.85	22 bps
OP	302.85	312.47	-3.08	442.19	369.95	19.53	1,166.99	1,135.04	2.81
Other Inc.	26.40	32.74	-19.36	51.69	66.37	-22.12	128.20	92.79	38.16
PBIDT	329.25	345.21	-4.62	493.88	436.32	13.19	1,295.19	1,227.83	5.49
Interest	8.83	11.38	-22.41	20.99	27.68	-24.17	53.15	49.54	7.29
PBDT	320.42	333.83	-4.02	472.89	408.64	15.72	1,242.04	1,178.29	5.41
Depreciation	53.78	45.6	17.94	105.91	89.87	17.85	186.57	160.89	15.96
PBT	266.64	288.23	-7.49	366.98	318.77	15.12	1055.47	1017.4	3.74
Share of Profit/(Loss) from Associates	-0.31	-0.26	-19.23	-2.45	-1.43	-71.33	-0.23	-7.41	96.90
PBT before EO	266.33	287.97	-7.51	364.53	317.34	14.87	1055.24	1009.99	4.48
EO Income	0	0	-	0	9.72	-	9.72	0	-
PBT after EO	266.33	287.97	-7.51	364.53	327.06	11.46	1064.96	1009.99	5.44
Taxation	65.8	66.42	-0.93	88.74	-12.05	PL	179.05	244.37	-26.73
PAT	200.53	221.55	-9.49	275.79	339.11	-18.67	885.91	765.62	15.71
Minority Interest (MI)	2.6	1	160.00	3.88	0.96	304.17	3.82	6.56	-41.77
Net profit	197.93	220.55	-10.26	271.91	338.15	-19.59	882.09	759.06	16.21
P/(L) from discontinued operations net of tax	0	0	-	0	0	-	0	0	-
Net profit after discontinued operations	197.93	220.55	-10.26	271.91	338.15	-19.59	882.09	759.06	16.21
EPS (Rs)*	13.26	14.77	-10.26	18.21	21.19	-14.07	58.54	50.84	15.15

* EPS is on current equity of Rs 149.31 crore, Face value of Rs 10, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

Polycab India : Consolidated Segment Results

	Quarter ended				Year to Date				Year ended
	% of (Total)	202109	202009	Var.(%)	% of (Total)	202109	202009	Var.(%)	% of (Total)	202103	202003	Var.(%)
Sales
Wires and Cables	79.83	2,628.08	1,826.84	43.86	81.06	4,255.03	2,652.05	60.44	80.29	7,603.49	7,589.84	0.18
FMEG	10.42	342.93	243.96	40.57	10.19	534.81	381.76	40.09	10.92	1,034.11	835.58	23.76
Others	2.89	95.03	70.93	33.98	3.18	166.79	124.31	34.18	3.17	299.76	596.49	-49.75
Copper	6.87	226.20	130.34	73.54	5.58	292.86	145.33	101.52
Total Reported Sales	100.00	3,292.24	2,272.08	44.90	100.00	5,249.49	3,303.44	58.91	100.00	9,470.35	9,021.91	4.97
Less: Inter segment revenues		147.70	134.17	10.08		211.69	176.61	19.87		466.51	144.07	223.81
Net Sales	100.00	3,144.54	2,137.91	47.09	100.00	5,037.80	3,126.84	61.11	100.00	9,003.84	8,877.84	1.42
PBIT
Wires and Cables	85.30	230.51	254.12	-9.29	90.02	337.86	278.53	21.30	85.31	918.73	930.89	-1.31
FMEG	6.37	17.20	19.63	-12.35	0.77	2.87	14.06	-79.58	5.26	56.60	16.83	236.32
Others	5.83	15.74	10.02	57.20	6.23	23.37	17.18	36.01	4.24	45.63	90.31	-49.48
Copper	2.51	6.79	12.30	-44.84	2.99	11.21	12.05	-7.00
Total PBIT	100.00	270.25	296.06	-8.72	100.00	375.31	321.83	16.62	100.00	1,076.93	1,038.02	3.75
Less : Interest		8.83	11.38	-22.43		20.99	27.68	-24.15		53.15	49.54	7.30
Add: Other un-allcoable		4.92	3.29	49.29		10.21	32.91	-68.98		41.18	21.50	91.52
PBIT Margin(%)
Wires and Cables		8.77	13.91	-513.89		7.94	10.50	-256.20		12.08	12.26	-18.19
FMEG		5.02	8.04	-302.82		0.54	3.68	-314.67		5.47	2.01	345.90
Others		16.57	14.12	244.75		14.01	13.82	18.88		15.22	15.14	8.14
Copper		3.00	9.44	-643.93		3.83	8.29	-446.63		10.50	0.00	1,050.31
PBT	100.00	266.33	287.97	-7.51	100.00	364.53	327.06	11.46	100.00	1,064.97	1,009.99	5.44

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