Polycab India held a conference call on 20 July 2022 to discuss the results for the quarter ended June'22 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

• Q1FY23 revenue grew 48% YoY with broad based growth across segments and markets fuelled by stong performance in B2B and B2C categories. Around two third of growth is led by volume growth and balance is due to higher realizations

• Volumes of the company has reached higher than the pre pandemic levels

• EBITDA margin improved 420 bps YoY to 11.3% led by calibrated price hikes and better operating leverage. PAT was up 202% YoY and PAT margin improved to 8.1%.

• Wires & cables business saw a strong growth of 48% YoY. The growth was broadly uniform across cables and wires. While domestic distribution driven business sustained its strong growth momentum, institutional business improved its performance compared to same quarter last year.

• On the geographical front, the Wires & cables business growth was broadbased with the highest contribution from west followed by south, north and east region.

• Wires & cables export business contributed 6.7% to consolidated revenue and reported a healthy revenue growth of 62%. The growth was driven by USA, Africa and Australia.

• Wire business was impacted by high volatility in metal prices. Consequently, the inventory levels and trade was slightly below normal. And overall capex also slowed down.

• FMEG business grew by 59% YoY to Rs 305.2 crore. While lighting, switchgears and pump continued their strong growth momentum, Fans, Conduit Pipes and Solar business posted healthy growth. However, switches saw a decline due to supply challenges.

• FMEG segment PBIT increased to Rs 6.2 crore, with a 2% margin largely on account of pricing actions, cost saving initiatives and premiumisation partly offset by input cost pressures.

• The company is committed to achieving 12% annualized EBITDA margin in FMEG business by FY26

• Other segment which largely comprises of EPC business witnessed a 31% YoY increase in revenue to Rs. 75.1 crore. Segment PBIT was 62% higher on YoY basis but down by 14% QoQ. Margin stood at 14%, up by 270 bps YoY. Annual sustainable operating margin in this business is expected to be in high single digit over mid to long term

• The company made significant progress in its flagship transformation program - Project Leap. Several initiatives were undertaken including set up right organization enablers, improve Customer centricity, augment Go -To - Market and re-energize Product portfolio.

• The company expects the industry will continue to move toward a more organized marketplace, irrespective of what happens to the commodity prices.

• The company remains committed to achieving Rs 20000 crore sales by FY 2026.

• The company expects to maintain margin of 11-13% going ahead.