💰 Financial Performance

Revenue Growth by Segment

The Wires & Cables (W&C) segment grew 18% YoY in FY25, contributing ~87% of total revenue. The Fast Moving Electrical Goods (FMEG) segment grew 30% YoY in FY25, contributing ~7% of revenue. The Engineering Procurement & Construction (EPC) segment grew 143% YoY to INR 1,900 Cr, contributing ~9% of total sales.

Geographic Revenue Split

Domestic revenue is led by the West region (largest contributor), followed by South, North, and East. International business (exports) contributed 6% to overall turnover, reaching INR 1,345.2 Cr in FY25, despite a modest de-growth due to geopolitical challenges.

Profitability Margins

Operating margins remained healthy at 13.4% in FY25 (vs 13.9% in FY24). In H1 FY26, operating margins improved significantly to 15.4% (up from 11.92% in H1 FY25) due to premiumization and better operating leverage. FMEG segment turned EBIT positive in Q4 FY25.

EBITDA Margin

The company targets FMEG EBITDA margins of 8-10% by FY30. Overall operating margin for FY25 was 13.4%, a slight 50 bps compression YoY, but rebounded to 15.4% in H1 FY26. EPC segment EBIT margin stood at 9.41% in FY25.

Capital Expenditure

Polycab has committed a capital expenditure of INR 6,000 Cr to INR 8,000 Cr over the next five years (FY25-FY30), translating to approximately INR 1,200 Cr to INR 1,600 Cr per annum, funded primarily through internal accruals.

Credit Rating & Borrowing

CRISIL reaffirmed 'AAA/Stable' for long-term and 'A1+' for short-term facilities. Gearing is exceptionally low at 0.15x as of March 31, 2025 (down from 0.24x in FY24). Interest coverage ratio remains robust at 19.6x in FY25.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Copper, Aluminum (manufactured into rods in-house), and Polyvinyl Chloride (PVC). These materials constitute a significant portion of the cost of goods sold, though specific percentage splits per material are not disclosed.

Import Sources

Not disclosed in available documents; however, the company mentions exposure to global commodity price volatility and trade route challenges affecting international business.

Capacity Expansion

The company is undertaking consistent capacity additions to meet growing domestic demand, supported by the INR 6,000-8,000 Cr five-year capex plan. Specific MTPA/unit capacity figures are not provided.

Raw Material Costs

Raw material costs are managed through embedded derivatives and forward contracts to ensure margin stability. The company utilizes backward integration for aluminum rods and PVC to optimize costs and quality.

Manufacturing Efficiency

Efficiency is driven by integrated operations and 'Project Spring' initiatives. Operating leverage contributed to a 348 bps margin improvement in H1 FY26.

Logistics & Distribution

The company maintains an extensive pan-India distributor network. Advertising and Promotion (A&P) spends for the B2C segment are targeted at 3-5% of B2C turnover.

📈 Strategic Growth

Expected Growth Rate

14-15%

Growth Strategy

Growth will be driven by 'Project Spring' and 'Project LEAP'. Strategy includes growing W&C at 1.5x the industry rate, expanding the FMEG business to achieve 8-10% EBITDA margins by FY30, and transitioning to a hybrid distribution-institutional model in international markets like the U.S.

Products & Services

Wires, Cables (specialized and general), Fans, Switches, Switchgears, Lighting solutions, and EPC services for power distribution (RDSS).

Brand Portfolio

Polycab, Etira (value switches), Levanna (premium switches), Silvan (innovation/automation).

New Products/Services

Launched 6kA MCBs (contributing 12% of switchgear sales) and the Etira/Levanna switch series. FMEG growth of 30% was driven by these new product verticals.

Market Expansion

Targeting expansion in the U.S., Middle East, Australia, Europe, and LATAM (Chile/Brazil) for specialized cable applications in renewables, data centers, and mining.

Market Share & Ranking

Polycab is the market leader in the organized Indian W&C industry with a 25-26% market share (up from 18-19% in FY19). It is also among the Top 5 Indian B2C switchgear companies.

Strategic Alliances

Acquired Silvan Innovation Labs Pvt Ltd to enhance R&D and product innovation in the FMEG and automation space.

🌍 External Factors

Industry Trends

The Indian W&C industry is in a multi-year upcycle, expected to reach INR 1.5 trillion by 2034. Global W&C industry is projected to grow at a 7.4% CAGR through FY30, driven by renewables and data centers.

Competitive Landscape

Faces competition from both organized and unorganized players. Organized players are gaining share due to brand trust and safety compliance (fire-safe solutions).

Competitive Moat

Moat is built on a 25-26% market share, extensive distribution network, and high backward integration (Aluminum/PVC), which provides a cost and quality advantage over unorganized players.

Macro Economic Sensitivity

W&C industry growth is linked to real GDP, typically expanding at 1.5-2x the GDP growth rate. Private capex and Gross Fixed Capital Formation (GFCF) trends directly impact B2B demand.

Consumer Behavior

Shift toward branded, certified, and premium products (e.g., Levanna switches) and increasing demand for energy-efficient/smart solutions in the residential segment.

Geopolitical Risks

Structural and geopolitical challenges led to a modest de-growth in exports in FY25. Trade route challenges are cited as a primary headwind for international volumes.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with safety and quality standards is mandatory. The company benefits from government schemes like the Revamped Distribution Sector Scheme (RDSS) and the National Electricity Plan.

Environmental Compliance

The company reports zero instances of complaints related to child or forced labor and maintains an Ethics Framework and Code of Conduct.

Legal Contingencies

Management evaluated internal controls as of March 31, 2025, and noted no significant deficiencies or material weaknesses impacting financial statements.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility and intense competition in the FMEG segment are key risks. A sustained decline in operating margins below 10% is a CRISIL downward rating factor.

Geographic Concentration Risk

Domestic revenue is concentrated in the West and South regions. International revenue is currently low at 6%, creating a dependency on the Indian infrastructure cycle.

Technology Obsolescence Risk

The company is mitigating this through R&D investments and the acquisition of Silvan for smart/new-age innovative solutions.

Credit & Counterparty Risk

Receivables quality is supported by a diverse client base and institutional/distribution models. EPC contract assets increased by INR 71.7 Cr in FY25.