The company’s topline/EBITDA/PAT grew 26%/47%/49% year-on-year, marking a strong start to the financial year.
Both the Cables & Wires (C&W) and FMEG segments reported strong topline growth of 33% and 18%, respectively, 11% and 18% ahead of UBS estimates.PBIT margins for C&W and FMEG came in at 14.7% and 2.1%, beating UBS estimates by 20 bps and 500 bps, respectively.
FMEG reported its second consecutive quarter of profitable growth.
The ‘Others’ segment saw a 33% decline in revenue, largely due to slow execution of recent orders.
Cash from operations remained strong at ₹1,070 crore, while net cash stood at ₹3,100 crore.
Jefferies also raised its target price from ₹7,150 to ₹8,180 per share.
The brokerage mentioned Polycab’s highest-ever Q1 sales and profit, which underscore its strong execution capabilities. Jefferies expects earnings to grow 26% annually between FY26 and FY28, driven by volume growth and margin expansion in FMEG.Morgan Stanley maintained an ‘Overweight’ rating on the stock, with a target price of ₹7,352 per share, citing C&W volume growth of over 25% as likely.
Citi has a ‘Buy’ call with a target price of ₹7,700. It said strong revenue growth of 26% YoY, which was 5% above its estimate, along with EBITDA margin expansion of 210 bps YoY to 14.5% (vs its estimate of 12.9%), leading to EBITDA and PAT growth of 47% and 50% YoY, respectively.
Polycab’s Q1 results
Revenue for the quarter increased by 25.7% from last year to ₹5,906 crore. According to a CNBC-TV18 poll, the company’s revenue was seen increasing by 20% from last year to ₹5,651 crore.
Polycab’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 47.1% to ₹858 crore, well above the 31% growth projection in the CNBC-TV18 poll to ₹762 crore.
EBITDA margins for the quarter expanded by over 200 basis points from the year-ago period to 14.5%. A CNBC-TV18 poll had pegged the figure at 13.5%.
Net profit for the quarter increased by 50% from the year-ago quarter to ₹600 crore, comfortably surpassing the CNBC-TV18 poll estimate of ₹518 crore.
The company’s wires and cables business reported revenue of ₹5,228 crore from ₹3,995 crore last year. The FMEG business increased to ₹454 crore from ₹385 crore during the year-ago quarter. EPC business revenue stood at ₹347 crore from ₹427 crore last year.
Polycab’s EPC business, which earlier featured in the ‘other’ category, will now be reported separately, after it met the qualitative threshold for separate disclosure.
Shares of Polycab India have erased some early gains and are now trading 0.76% higher at ₹6,940.00. The stock has climbed 16% in the last one month.
