Polycab India Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Demand deferred, not destroyed: Wires & Cables revenue grew 30% YoY but volume was low single digits as the Middle East conflict and raw material volatility pushed distributor lifting into future periods. Management insists demand only defers by weeks, and the 24-36 month sector outlook remains very promising.
• Market share gains are structural: Domestic organized market share reached 30-31%, up 300-400 bps over FY25 and roughly 12 percentage points since FY19, driven by the shift to organized players and Polycab's distribution and scale advantages.
• FMEG turned the corner on profitability: The segment delivered 47% YoY growth and a 4.1% EBIT margin, staying on the Project Spring trajectory toward 8-10% EBITDA by FY30, with solar products growing 2x.
• Margins absorbed a mix shift: Wires & Cables EBIT margin of 13.1% was pressured by a higher institutional sales mix and softer March trade sentiment, not by raw material costs, which were fully passed through.
• What to watch next quarter: Whether the deferred Q4 volume materializes in Q1 FY27, the pace of export contribution as the US distribution network ramps, and any margin recovery as the institutional mix normalizes.

Wires & Cables: The Volume-Mix-Margin Triangle

• Volume grew low single digits against a tough base: Q4 FY25 was a very strong quarter, and the low single-digit volume growth this quarter was below expectations, attributed to Middle East escalation, a 60-80% PVC price spike in early March, and distributor caution as secondary sales slowed.
• March, typically the best month, disappointed: The West Asia crisis hit at the worst possible time because Q4 is seasonally the strongest quarter and March the strongest month, so the disruption to trade sentiment and distributor lifting was magnified.
• Institutional mix rose 2-3 percentage points: Institutional sales carry 3-4% lower margins than channel sales because of tender-based L1 bidding, so the mix shift mechanically compressed Wires & Cables EBIT margins to 13.1%.
• Raw material costs were fully passed through: Polycab passed on all raw material price inflation in the first fortnight of January and stayed in tandem throughout Q4, including PVC and other insulation materials. Unlike peers, the company runs a hedging mechanism for copper and aluminium and never books inventory gains or losses.
• Full-year volume growth was industry-leading at 18%: The market likely grew 11-12%, so Polycab gained roughly 3-4% market share in FY26, continuing a multi-year structural shift. Cables growth was slightly better than wires for the full year.
• Backward integration provides raw material security: Polycab purchases raw resins and does compounding in-house for XLPE and other compounds, and its heavy inventory position leaves it comfortable for Q1 of the coming year.

Shashank Yagnick: "We don't buy on spot, right? So we have a hedging mechanism in place. So we don't have any inventory gain unlike peers. Possibly, they might buy in spot market and sell."

FMEG: Growth With a Path to Margin

• 47% YoY growth was broad-based: Fans grew despite a delayed summer and channel inventory adjustments after BEE norm changes, driven by premiumization and energy efficiency. Lighting sustained growth despite deflationary pricing. Switchgears, conduit pipes, and switches benefited from real estate and construction momentum.
• Solar products delivered 2x growth: Central and state government rooftop solar schemes and rising consumer adoption made solar the standout driver within FMEG.
• Profitability is now sustained, not a one-off: FMEG turned profitable in Q4 FY25 and has continued delivering profitability while investing, with Q4 FY26 EBIT margins of 4.1% in line with the Project Spring trajectory of 8-10% EBITDA by FY30.
• All FMEG segments outpaced industry growth: The performance was described as stellar and far ahead of industry growth rates, consistent with the Project Spring target of 1.5x-2x industry growth.

Exports & International: Building the 10% Bridge

• International business grew 18% YoY despite Middle East headwinds: The Middle East contributed 16% of export topline in FY26, and the conflict there affected what is normally a high-margin accretive business. Exports on an absolute basis continued to grow.
• The US distribution network has been re-established: In the last 3-4 months, Polycab rebuilt its distribution presence in the United States, positioning for growth as EU and US grid infrastructure, much of it 50-60 years old, needs modernization.
• The tariff situation is now behind the company: Management stated the tariff environment has more or less settled, and Polycab's scale, approvals, and deep geographic penetration put it at pole position to capture export growth.
• The FY30 export target of 10% of topline may arrive sooner: Exports currently sit at 5.4% of topline, and management expressed hope of reaching the 10% target sooner than FY30, with exports expected to grow at a more aggressive pace.

Shashank Yagnick: "Considering our scale, our approvals, our deep penetration in these geographies, we are at pole position to capture the growth. And even the tariff situation has more or less settled, or we can say it's now behind us."

EPC: A Cyclical Downturn

• Revenues declined 15% YoY to ₹509.8 crore: The decline was attributed to the project execution cycle, not to any structural loss of business.
• Mid- to high single-digit margins remain the sustainable expectation: Management reiterated that annual sustainable operating margins for the EPC segment are expected to remain in the mid- to high single digits over the mid to long term.

Capital Allocation & Project Spring

• Capex of nearly ₹1,500 crore was deployed in FY26: This is in line with the annual guidance of ₹1,200-1,600 crore and the five-year program of ₹6,000-8,000 crore through FY30.
• EHV capacity is on track for end-of-calendar-year commissioning: Roughly 50% of domestic EHV consumption today comes from imports, so the new capacity will address a ready market, with revenue contribution expected from FY28.
• Dividend payout ratio rose to 27.2%: The proposed dividend of ₹47 per share represents a step toward the Project Spring goal of exceeding 30% payout by FY30.
• Working capital is expected to normalize to 45-50 days: The elevated working capital levels seen recently should revert to the steady-state range on a normalized basis.

Demand Environment & Macro

• The Middle East conflict was the quarter's defining disruption: The outbreak of conflict between the US, Israel, and Iran in late February 2026 sent crude oil toward \$100/barrel, disrupted the Strait of Hormuz, and triggered renewed inflationary pressures and a sharp repricing in global bond yields. Central banks pivoted from easing to caution or tightening.
• India's macro remained supportive but showed moderation: FY26 GDP growth was projected at ~7.6%, the fastest in recent years, and the RBI delivered 125 bps of cumulative rate cuts. However, Q4 high-frequency indicators softened, with air passenger traffic, port cargo, and e-way bills moderating from January to March.
• Crude oil and rupee depreciation are the near-term headwinds: The sharp rise in crude and the rupee's record low of ₹94.83 per USD will exert upward pressure on inflation, with CPI expected to edge higher and the RBI likely to remain on an extended pause.
• New demand pockets remain under-exploited: Areas like defense and data centers have yet to fully bloom or be exploited, adding a layer of structural demand beyond the current cycle.

Shashank Yagnick: "One comforting thing is that in our industry, the demand doesn't extinguish. So it can only defer by 1 week, 2 weeks here and there. But if you look at 12-month period coming forward, I think not just the next 12 months, but I think 24-36 months are going to be very promising for our sector."

Guidance & Commitments

Key Metrics