Polycab India Ltd - Q3FY21 First Cut - ICICI Direct

(CMP : Rs. 1279 Mcap: Rs. 19074 crore)

Polycab reported a good set of numbers for Q3FY21 led by strong recovery in wires & cables and FMEG businesses.

Q3FY21 Earnings Summary

Polycab's consolidated revenue increased by ~12% YoY at ~Rs. 2799 crore led by ~11% YoY growth in the wires & cables business to Rs. 2407 crore. Business from distribution channel saw healthy double -digit growth however institutional business continues to face headwinds. On the FEMG front, revenues were up by 41% YoY at Rs. ~306 crore on the back of buoyant consumer demand, distribution expansion, better product mix and price hikes.

The gross margin declined by ~318 bps YoY largely on account of delay in passing of higher raw material prices. However, EBITDA margin was almost flat at 13.4% on a YoY basis mainly due to significant savings in other operating costs (due to improved operating leverage)

PAT came in at Rs. ~264 crore up by ~19% YoY supported by higher other income during Q3FY21.

We believe, the company has witnessed strong sales recovery in the B2C category, however institutional sales are yet to pick up. Polycab being a strong brand in wires & cables industry with a healthy balance sheet is well placed among competitors to cope up the lost sales as demand returns to normalisation. We will come out with detailed reported post concall.

Source : Equity Bulls

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