Polycab's FMEG business saw 71% growth on a year-on-year basis with growth witnessed across product categories. Solar Products was a key growth driver, with growth doubling over the previous year and it is now the largest category within the FMEG portfolio.

By Hormaz Fatakia

Polycab India Ltd., the wires and cables manufacturer, reported June quarter results on Thursday, July 16, which were better than expectations across parameters.

Revenue for the quarter increased by 39% on a year-on-year basis to ₹8,209 crore, higher than the CNBC-TV18 poll estimate of ₹7,902 crore. Polycab had reported revenue of ₹5,906 crore during the same quarter last year.

The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter grew by 32.5% on a year-on-year basis to ₹1,136 crore, marginally higher than expectations of ₹1,062 crore and last year's figure of ₹857.7 crore.

EBITDA margin for the quarter narrowed by 70 basis points on a year-on-year basis to 13.8%. A CNBC-TV18 poll had expected the margins to narrow to 13.4%.

Polycab's wires and cables business revenue grew by 38% on a year-on-year basis to ₹7,202 crore, while its segment EBIT stood at ₹959 crore from ₹756 crore last year. An estimate from Motilal Oswal had pegged the revenue growth to be 35%.

Growth in the wires & cables business was led by a 43% increase in domestic revenue, supported by healthy market demand and on ground execution under project spring. Wires segment outperformed the cables segment during the quarter with channel sales being higher than institutional sales within the cables business.

Polycab's FMEG business saw 71% growth on a year-on-year basis with growth witnessed across product categories. Solar Products was a key growth driver, with growth doubling over the previous year and it is now the largest category within the FMEG portfolio. EBIT margins for the segment also expanded to 8% led by better operating leverage and a more premium product mix.

Revenue for the EPC business was also in-line with the timing of the project execution cycle, resulting in an 11% decline for the quarter. EBIT margins for the segment stood at 11%.

"Looking ahead, sustained government infrastructure investments and improving on-ground project implementation are expected to create significant growth opportunities. Supported by a strong financial position and ongoing investments in capacity enhancement, innovation, and distribution expansion, we are well-positioned to strengthen our market leadership and deliver sustainable, industry-leading growth over the long term," Inder T. Jaisinghani, the Chairman and Director of Polycab was quoted as saying.

Shares of Polycab India are currently trading 1.3% lower after the earnings announcement at ₹9,202. The stock has risen 22% so far this year.