Polycab India held a conference call on 19 October 2022 to discuss the results for the quarter ended September 2022 and way forward. Mr. Inder T Jaisinghani- Chairman and Managing Director and Mr. Gandharv Tongia - CFO of the company addressed the call.

Highlights of the Concall

• Revenue were up 11% YoY in spite of high base, declining commodity prices and burgeoning inflation on the back of healthy volume growth in cables and wires business

• Wires and cables business revenue grew 13% on YoY basis to R 2925.9 crore. Domestic distribution driven business continues to see strong momentum. Institutional business too saw healthy growth.

• Exports business exhibited strong growth of 75% YoY on a healthy base, led by USA, Europe and Asia. Demand from sectors like Oil & Gas, Renewable and Infrastructure remained strong globally. Overall, exports business contributed to 13% of consolidated revenue in Q2 FY23

• EBITDA margin improved by 149 bps sequentially to 12.8% on account of strong growth in exports and judicious price revisions

• FMEG business de-grew 12% YoY mainly due to subdued demand environment, exacerbated by realignment in distribution strategy undertaken under Project LEAP to improve long-term business growth. Demand from rural segment was especially muted

• Fans business was affected on account of seasonality, inflationary environment and transition to the new BEE regulations. Switch business recovered from the lows of Q1FY23, posting 123% QoQ growth

• The company merged fans vertical with lights & luminaries vertical and retail wires vertical with switches & switchgears vertical to unlock latent value through cross-selling opportunities and operational efficiencies

• Capacity utilization for wires and cables business is around 65-70% for the quarter

• The company is good traction in terms of demand and generally second half of the year is better than first half of the fiscal year. So, the company expects better performance in Q3 and Q4 from Q2 and Q1 of FY23.

• The company cash position has double to around Rs 1600 crore in last one year due to better business and improvement in working capital.

• The company is doing capex of Rs 400 crore every year and expects something similar to continue in coming years.

• The company is also looking towards additional opportunities where it can make more investment to get better returns.

• The company is confident of getting 10% Ebitda margins in FMEG business by FY26