Analyst Meet / AGM     24-Jan-25
Conference Call
Polycab
Domestic C&W business to grow by 1.5 times of the industry

Polycab hosted a conference call on Jan 23, 2025. In the conference call the company was represented by Inder T. Jaisinghani , CMD and Gandharv Tongia, ED & CFO.

Keytakeaways of the call

Demand environment continues to be strong. General Elections has slowed down the government spending for the last few quarters but with vision of Vikshit Bharat by 2047, the spending are to pickup going forward. The demand is expected to pickup  in coming quarters.

The company expects to grow its domestic C&W business by 1.5 times of the growth rate of the Indian C&W industry, which is expected to grow at 1.5 times of real GDP growth of the company. The company expects the EBITDA margin of about 11-13%, which is more sustainable over long term. 

The company expects its FMEG business to grow at 2 times of the industry growth.

In Q3FY25, volume growth cables  was in double digit and that of wires in single digit and the volume growth of C&W together is early double digit.

Having achieved its target revenue of Rs 200 billion under Project Lead, the company has launched Project Spring for next 5 years. Over the next 5 year the company will lay the foundation for multi decade growth under this ‘Project Spring’.  Six  pillars of ‘Project Spring’ are: solidifying Market Leadership in B2B; Propelling B2C Expansion; Ramp-Up International Business; Innovation & Automation - Led Holistic Development; Nurture Talent & Capabilities; Growing ESG Integration.

Looks to evolve into an electrical solutions supplier for the customers in B2B marketplace.

Export demand is very large. Expect export growth rate is to be faster than domestic growth rate. Expect exports to account for 10% of the revenue.

International order book strong and expect to sustain the growth momentum of Q3 in Q4fy25 as well. The company has expanded its market presence to 81 countries.

Inventory position at retail channel: Started Q3FY25 with a higher inventory. Wire offtake was lower in Q3FY25. The copper price fell by 9% during this quarter. Now channel inventory is normal and wire offtake is expected to be normal in Q4FY25.

Next few fiscal the company expect the growth momentum of 9mFY25 to sustain for wires.

Expansion of capacity is for all products across the board in C&W and moreover the capacity will be fungible in nature offering flexibility to change product mix depending on demand. Capex in EHV plant is roughly about Rs 6-7 bln and the plant will be commissioned by FY26. Every year the company will incur a capex of about 10-12 billion.

Indian cables export to US attracts 3-5%  duty against 0% from Mexico. So any duty on Mexico exports will be good for India.


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