Newly listed company Polycab India Limited reported a decent FY19 revenue (net of excise) of Rs 79,560 mn up by 18% yoy. This growth can be attributed to the success in its wire and cable business. It has also secured an EBITDA of Rs 10,142 mn in fiscal year 2019, up by 28% from last year. The hike in the EBITDA and its margins of 12.7% is due to the sales and product mix. The EBITDA margins for the previous year stood at 11.7%.
Polycab banks a lot on its FMEG like solar products, luminaires, LED Lighting, electric fans, switchgear, etc. Their FMEG business grew 33% to Rs 6,433 mn in FY19 from Rs 4, 853 mn in FY18. The FMEG saw a small drop in Q3 19 but the company feels it still gave a significant amount of EBITDA. However, the company went on to clarify that the Q3 EBITDA’s increase was not a normal increase.
Polycab says the commodity market deeply affects the company and its products namely copper, aluminum and PVC. The EBIT margins are up from 10.1% to 11.8% in FY19. The PAT grew by a whopping 40% to Rs 5,003 mn from Rs 3,586 mn in FY2018. The PAT margin is also up 1% from 5.3% in FY18 to 6.3% in FY19.
The revenue has seen a 16% increase to Rs 24,448 mn from Rs 21,102 mn in Q4FY18. Polycab admits that EBITDA margins were driven by sales and product mix. This is why some quarters see a higher than normal EBITDA, however the margins usually remain in the 11% to 13% bracket.
The gross debt is lower by 66% to Rs 2,724 mn in FY19 from Rs 8,003 mn in FY18. The ROCE and ROE at 27.9%
and 17.5% respectively for FY19 from 21.0% and 15.2% in FY18. The debt to equity is placed at a decent 0.1x as of March 2019, down from 0.34x as of March 2018.
Though as a segment Polycab focuses on the urban market share, the program JOSH has helped it expand into the ru-urban and Pan-Indian areas.
The Chief Executive, Polycab India Limited, R. Ramakrishnan, stressed that Polycab doesn’t chase revenue for the sake of revenue. He concluded by saying that they are working to enhance stakeholder value, to build a brand effectively and to invest in mass premium products. Polycab believes that it is the rising competition.
