POLYCAB - Polycab India Limited Share Price

In the earnings conference call held on May 06, 2026, Polycab India Limited management expressed a strong outlook despite macroeconomic challenges. CFO Niyant Maru highlighted that the company recorded the highest annual and quarterly revenues in its history, achieving consolidated revenue of Rs.285 billion for FY26, a 29% year-on-year growth. The EBITDA for the same period grew 35% year-on-year with margins expanding to 13.9%. The quarterly PAT reached Rs.7.9 billion, reflecting a growth of 7% year-on-year.

Key forward-looking points from management included:

1. Market Growth Commitment: The company is committed to sustaining a growth momentum, aiming for 1.5x the market growth rate, which aligns with the ongoing expansion in the country's infrastructure sectors.
2. Investment in Capex: A total capex of approximately Rs.14.8 billion was reported for FY26. Polycab is on track to invest Rs.60 billion to Rs.80 billion over the next five years to enhance capabilities and scale.
3. Product and Geographic Expansion: Management indicated significant gains in market share for its domestic wires and cables segment, now estimated at 30-31%, up from 18-19% in FY19.
4. Optimism for Exports: Despite recent geopolitical instability affecting the Middle East, management expressed confidence in recovering exports, targeting a contribution of greater than 10% from exports by FY30.
5. Economic Conditions: The company noted optimism about India's ongoing economic growth, projecting a GDP growth of around 7.6% for FY26, bolstered by strong domestic demand and government capital expenditure.

These strategic plans position Polycab for continued growth within the electrical industry while navigating external challenges.

Question 1: "Cables & Wires sales growth of 30%, if we could break up on the approximate growth -- volume growth in Cables & Wires and also the price hikes that we have taken from Jan till now in different tranches?"

Answer: "The revenue growth has indeed been 30% for the quarter. However, our combined volume growth for both cables and wires has been low single digits. Notably, cables grew faster than wires. In terms of pricing, we've implemented cumulative price hikes of approximately 18% to 19% from January to March."

Question 2: "How is the demand situation now? There has been some normalization of demand across sectors?"

Answer: "We've certainly seen some moderation in demand due to volatility tied to the Middle East situation. However, domestic demand remains fundamentally robust, supported by strong power capacity additions of around 55-56 gigawatts last year and a promising INR 12.2 lakh crores budget for FY27, with significant investments directed towards sectors that will drive cable demand."

Question 3: "Do you see exports resuming over the coming quarters? Which sectors would you be the most optimistic in exports?"

Answer: "Exports are poised to be a significant growth driver for us, especially as the Middle East situation stabilizes. The power sector will continue to drive strong growth, particularly in North America and the EU, where infrastructure needs modernizing. We're well-positioned to capture this growth, especially with our re-established distribution network in the U.S."

Question 4: "Can you give an overall business outlook for FY '27?"

Answer: "For FY27, we aim to maintain our growth momentum. Our guidance indicates that we plan to achieve a growth rate of 1.5 times that of the market, anticipating market growth around 10-12%. Our focus will remain on both domestic and export growth as we continue to expand our capacity and market reach."

Question 5: "What was the impact of Middle East-related disruptions in March?"

Answer: "March typically brings high sales volumes, yet disruptions due to the escalating situation in the Middle East led to a decline in private sector demand, impacting our overall volume growth. Trade sentiment was dampened as supply chains faced challenges, contributing to lower-than-expected volume growth."

Question 6: "What is the status on capacity utilization now?"

Answer: "Currently, our capacity utilization is around 75-76%. We continuously invest in expanding capacity, and we expect to maintain this utilization rate as demand grows. We are ahead of the curve with our planned capital expenditures to meet future growth needs."

Question 7: "Will you consider any acquisitions or new business ventures with your significant cash reserves?"

Answer: "For now, our focus remains on increasing our capital expenditure and dividend payout. We regularly evaluate M&A opportunities, both domestically and internationally, but no immediate plans align with our strategy at this moment."

Question 8: "How do you see profitability settling in the next 2-3 quarters?"

Answer: "Our EBITDA margin target remains between 12% to 14% in the near to mid-term. We're confident in our ability to maintain these margins as we continue to pass raw material costs onto customers and capitalize on our Project Spring guidance."

Question 9: "What is the current status of your EHV capex, and when do you expect revenue from this capacity?"

Answer: "Our EHV capacity is projected to come online by the end of this calendar year, and we anticipate seeing revenues from it starting in FY28, given the existing demand and market readiness."

Question 10: "How did you manage raw material cost pass-through in Q4?"

Answer: "We were successful in passing through raw material costs promptly in January, ensuring alignment with rising prices throughout the quarter. Our procurement strategy prevents inventory gains or losses, optimizing our material costs effectively."