Polycab reported a 100% sales recovery in FY21E despite a 50% loss of revenue in Q1. Strong pent up demand and pick-up in infra spending post easing of lockdown restrictions helped the company cover up the loss of sales. Segment wise, fast moving electrical goods (FMEG) reported strong growth of 24% YoY in FY21E led by new product launches and dealer additions (3000 in FY21 vs. 1750 in FY20). Thus, segment revenue contribution in overall topline has also increased to 12% in FY21 vs. 9% in FY20. On the wire & cable (W&C) front, Polycab reported 100% sale recovery in FY21, better than 86% recovery of KEI Industries. Strong brand and leadership position of 'Polycab' in the W&C business (organised market share of 22%) helped in the fast recovery. On the margin front, EBITDA margin has seen marginal improvement in FY21 to 13.1% led by various cost optimisation measures. The balance sheet stayed strong with net cash position at Rs. 906 crore along with stringent working capital management. Over the long term, Polycab aims to achieve Rs. 20,000 crore of sales from present ~Rs. 9000 crore through various strategic initiatives (new product launches in the premium category and expansion in newer geographies).
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