Polycab India - Q3FY22 First Cut - ICICI Direct

(CMP : Rs. 2555; MCap: Rs. 38168 crore)

Polycab reported a mixed bag performance in Q3FY22 with strong topline growth but higher inflation drags EBITDA margin.

Q3FY22 Earnings Summary

• Polycab reported a strong consolidated revenue growth of 23% YoY to Rs. 3372 crore led by 25% growth in wire & cable segment while FMEG business grew albeit on a slower pace of 11% due to higher base
• Wire & cable business reported strong revenue growth of 25% YoY to Rs. 2968 crore. Domestic distribution driven business continued to remain healthy, Institutional business bounced back strongly led by good uptick in private investments across industries. Normalised exports portfolio posted a healthy 24% YoY growth led by Africa, Asia and Australia. Overall, export business contributed 8.1% to consolidated revenue
• FMEG business grew 11% YoY to Rs. 340 crore in Q3FY22 on a challenging market environment and a stronger base. October saw a robust momentum however December was impacted by weaker trade and consumer sentiments arising out of the third wave
• EBITDA margin improved sequentially by 100bps (down 200 bps YoY) to 10.7% led by price hikes and better operating leverage, partly offset by input cost pressures and higher A&P spends
• PAT came in at ~Rs. 248 crore up 26% QoQ (flat on a YoY basis) largely tracking higher topline growth and improved margins

Polycab's wire & cable business witnessed an improved performance on both revenue and profitability front during Q3FY22. However, the FMEG segment witnessed lower EBIT margin of ~2% mainly due to delay in price hikes and higher advertisement expenditure. We await management commentary on future demand outlook and scope of price hikes to offset inflationary pressure. The detailed report will be released post conference call.

Shares of Polycab India Limited was last trading in BSE at Rs. 2510.30 as compared to the previous close of Rs. 2682.00. The total number of shares traded during the day was 117901 in over 20113 trades.

The stock hit an intraday high of Rs. 2697.00 and intraday low of 2487.80. The net turnover during the day was Rs. 303868738.00.

Source : Equity Bulls

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PolycabIndia INE455K01017 Q3FY22Results FirstCut ICICIDirect