Polycab India Ltd (BOM:542652) Q2 2025 Earnings Call Highlights: Record Revenue and Profit ...

GuruFocus News
4 min read

In This Article:

  • Consolidated Revenue Growth: 30% year-on-year increase for the quarter ended September 30, 2024.

  • EBITDA Growth: 4% year-on-year increase with an EBITDA margin of 11.5%.

  • Net Profit (PAT): Highest ever quarterly PAT of INR4,452 million with a PAT margin of 8.1%.

  • Net Cash Position: Improved to INR24.3 billion from INR16.4 billion in Q1 FY24.

  • CapEx: INR2.9 billion for Q2 FY25, totaling INR5.7 billion for the first half of the year.

  • Wires and Cables Segment Growth: 23% year-on-year growth, with domestic business growing 28% year-on-year.

  • FMEG Business Growth: 18% year-on-year growth.

  • EPC Business Revenue: INR5,488 million in Q2, marking 241% year-on-year growth.

  • International Business Contribution: 6.1% of the company's top line in this quarter.

Release Date: October 18, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Polycab India Ltd (BOM:542652) reported a 30% year-on-year increase in consolidated revenue for Q2 FY25, driven by strong performance across all business segments.

  • The company achieved its highest-ever quarterly PAT of INR4,452 million, with a PAT margin of 8.1%.

  • The wires and cables segment recorded a robust 23% year-on-year growth, with the domestic business registering a remarkable 28% year-on-year growth.

  • Polycab India Ltd (BOM:542652) has a strong net cash position, improving to INR24.3 billion compared to INR16.4 billion in Q1 FY24.

  • The company is on track to achieve its projected goal of INR200 billion in revenue for the current year, setting a strong foundation for future growth.

Negative Points

  • EBITDA margin declined by 90 basis points sequentially, primarily due to increased advertising and promotional expenses in the FMEG segment.

  • The retail wires business faced heightened competitive intensity, leading to margin compression.

  • Lower contribution from the higher-margin international business impacted overall margins, with international business contribution dropping from 9.3% in Q2 FY24 to 6.1% in Q2 FY25.

  • Higher losses in the FMEG business were reported due to increased organizational expenses.

  • The high growth in lower-margin institutional business relative to the channel business also contributed to the decline in margins.

Q & A Highlights

Q: Can you provide a breakdown of the cable and wires categories for the first half of this quarter and how it compares to the previous quarter? A: The growth in the wires segment was almost double that of the cable segment, with wires showing a 2x growth compared to cables. The mix for wires and cables generally remains around 70% to 30%, with a slight improvement in wires mix by about 100 basis points this quarter. Demand is strong across sectors, with higher exposure in manufacturing and real estate.

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