Polycab Q3 FY22 Concall transcript.
Q3 was the highest quarterly top line in the history of the company for the second continuous quarter.
Growth will be accelerated by Public procurement rules or the Gati Shakti National Plan and favorable consumer demographics and trends will provide a long runway for growth.
on Q3, consolidated revenue grew by 23% Y-o-Y and 34%. Q-o-Q basis our consolidated revenue grew by 12%. Q3 is the highest quarterly sales we have ever recorded.
Wire business was slightly impacted by high volatility in copper prices in early November and fears of lockdown impacting the trade sentiment in December and blended wires and cables volume grew on Y-o-Y basis and is also higher than pre pandemic levels.
Export business contributed 8.1% to consolidated revenue but declined by 8% Y-o-Y largely on account of one large order in base year also the business posted a healthy 24% Y-o-Y growth led by Africa, Asia and Australia.
FMEG business grew by 11% Y-o-Y. October saw a robust momentum, Fans had a slightly subdued quarter however growth in lights, pumps and conduit pipe business remains healthy. Switchgears and solar continue to witness strong demand.
Deepak from TATA group for project leap, Tapas from Havells for fans business and Deepak mitra from Crompton, vivek sharma MD Panasonic joined as deputy managing director.
Fan contributes to almost 35% to FMEG top line followed by lighting and luminaries which would be roughly around 30%, and switchgears would be around 10% to 15% followed by pipes and fittings which will be around 10% to 12%.
blended wire growth is around 20% to 25% growth.
On EBITDA margins : 11% and 13% on a sustainable basis, EBITDA margins have improved in the Q3 in comparison to Q2 despite the fact that they invested, like for example advertisement and publicity has increased from Rs.14 Crores to Rs.44 to Rs.45 Crores.
On passing of increased commodity price on cables and FMEG business → usually done on change in metal price and foreign exchange rate, between Q3 and Q2 EBDITA margins improves 70 basis points that means prices are reflecting in these businesses.
4100 dealers and distributors in our family. 50% of them are on FMEG
institutional business has recorded 150% growth which is a meaningful number in our B2B business
Fan contributing 25% to 30% in FMEG, Purocot fan internally innovated is giving edge to premiumization thing. For lighting business Hohm, Silvan and Smart IOT. FMEG margins to improve up to 12% by FY 2026.
fully committed to Project Leap agenda whereby we want to double our revenue in five years, fiscal 2026, which would mean that Rs.9000 Crores of top line of fiscal 2021 would be Rs.20,000 Crores by fiscal 2026, and it will come from all the businesses both B2B and B2C. : Polycab
Upon improving ROCE→ targeting to get to around 12% of margin by FY2026 + increasing utilization of our factories in FMEG as well as in cables and wires.
The FMEG on a two-year basis has recorded a 57% of growth in top line and similar numbers are there in cable and wire businesses.
As part of the phase one of Project Leap most of the senior resources have been already hired.
Government’s contribution to top line directly would be less than 2-2.5%.
One very good thread on polycab. do read.
also a good read → A Deeper Look at Polycab India's Financials