Polycab India Ltd Q2 FY2027 Concall Summary

Key Takeaways

• Record quarter, broad-based strength: Revenue grew 53% YoY to its highest ever, with all segments contributing and PAT reaching a record ₹990 crore.
• FMEG hits a milestone: EBIT margins crossed 10% for the first time, driven by scale, operating leverage, and a premium mix shift, validating the turnaround strategy.
• Wires and Cables volume anchored, not explosive: Domestic volume grew mid- to high-single digits on a tough base, with wires outpacing cables; management is confident in sustaining 11–13% medium-term margins.
• Competitive noise dismissed: Management sees no near-term threat from new entrants like UltraTech, calling their stated revenue potential "elusive at the moment" and noting the heat is on wires-heavy players.
• What to watch next quarter: The trajectory of FMEG margin sustainability above guided ranges, the resolution of the Asier Metals NCLAT case, and any impact from commodity or geopolitical volatility on export momentum.

FMEG: The Turnaround Story

• Profitability inflection: FMEG EBIT margins crossed double digits (10.1%) for the first time, a milestone since achieving profitability in Q4 FY25, driven by scale, operating leverage, and a richer mix.
• Premium mix shift: Fans' premium mix reached ~33% and lights ~38%, while a solution-driven, bouquet-offering approach complemented the building verticals and lifted realizations.
• Solar as primary engine: The solar inverter trading business registered multi-fold growth, propelled by structural tailwinds including PM Surya Ghar Yojana, state-level support programs, and accelerating consumer adoption.
• Broad-based category strength: All six categories (lighting, switchgear, fans, pipes and conduits, plus solar inverters) are growing significantly and beating industry growth rates.
• Growth ambition intact: Management remains confident FMEG will continue to grow at 1.5x to 2x of the industry rate while steadily enhancing profitability, and the segment's mix of the overall portfolio is "certainly going to grow."
• Long-term margin guide held: Despite crossing 10% EBIT this quarter, the official Project Spring target for FY30 remains an EBITDA margin range of 8% to 10%, with management noting some years may see high single digits and others double digits, in the context of Wires and Cables margins.

Aditya Nathany: "Today, we are already at an EBIT margin of 10.1%, which is very high. I would believe you would appreciate the kind of efforts that we have put together to get this segment turnaround in the way we have been seeing the results in this quarter."

Wires and Cables: Volume, Mix, and Margin Resilience

• Volume growth on a tough base: Domestic volumes grew mid- to high-single digits overall, with wires at early double digits and cables at mid-single digits, lapping an 18% volume growth base from last year.
• Mix shift drove margin expansion: Wires outpaced cables, and channel sales grew faster than institutional, both accretive to margins; overall Wires and Cables EBIT margins improved sequentially to 14.2%.
• Demand drivers intact: Real estate demand remains strong, serving launches from 2024, while government initiatives in manufacturing and anticipated 8th Pay Commission effects provide additional tailwinds.
• Pricing pass-through is routine: Copper prices rose 6% QoQ, but price pass-through happens monthly for cables and fortnightly for wires; no significant inventory stocking or destocking was observed in the channel.
• Copper exposure is hedged by model: The company operates on a cost-plus model and takes no view on copper direction, insulating it from commodity volatility.
• Long-term volume anchor: Management expects the wires and cables market to grow at ~12–13% (1.5x GDP), and Polycab aims to grow at 1.5x of that market rate.

Aditya Nathany: "We per se don't have a view on copper, and we never do that. So whatever copper prices happen, the good part is that we are not exposed to the kind of volatility that this is. So everything, we just work on a cost-plus model."

Exports: Strong Rebound, Geopolitical Overhang

• Sharp sequential pickup: Export sales grew 17% YoY and 85% QoQ, with contributions from Chile this quarter and Oman and Saudi Arabia in the prior quarter.
• Moderation in share is a denominator effect: The apparent moderation in export contribution share is largely attributable to significantly faster growth in the domestic market expanding the overall revenue base.
• Supply chain friction: Geopolitical disruptions dented some bookings, with shipping lines moving ahead by 10 to 12 days, creating logistics-related headwinds.
• Confident outlook, with a caveat: Management is very confident on growth prospects, citing a strong order book across the U.S., Europe, LATAM, and Asia, and expects exports to "certainly pick up from here," despite the risk element of U.S. trade policy.

Competition: UltraTech Entry Dismissed

• No near-term threat perceived: Management stated it sees "no real competition in the near term" from UltraTech's entry into wires, because the wires market is a very small portion of Polycab's overall business.
• Heat is on wires-heavy players: The competitive pressure is expected to fall on companies with a heavier mix of wires, not on Polycab's diversified portfolio.
• UltraTech's targets called elusive: Management characterized UltraTech's capex and revenue guidance (implying a potential of around 6x to 7x) as "elusive at the moment."
• No pricing response required: Polycab has taken no pricing action in response to the new entrant and is moving ahead with its existing plan.

Aditya Nathany: "The kind of capex that UltraTech has put into this industry, the kind of revenue guidance that they have given close to around potential of around 6x to 7x, it looks elusive at the moment."

EPC, Data Centers, and Other Bets

• EPC steady, not scaling: Revenue grew 53% YoY to ₹617.1 crore with EBIT margins of 7.2%; the order book remains roughly ₹9,000–10,000 crores, and medium-term margins are expected to stay in the high single-digit range.
• Data center ambition: Management firmly believes Polycab will capture the data center market sooner, given its capabilities, distribution network, and product portfolio; the R&D team is working to find the right products, and the company currently supplies the conventional part of data centers.
• EHV plant timeline slips: The EHV plant is now expected to commission sometime in FY28, with commissioning possibly starting in April or May of FY28.
• Solar manufacturing optionality: Polycab currently only trades solar inverters and does no manufacturing, but management stated it "would definitely not shy away to do that piece as well" whenever an opportunity arises.

Legal Update: Asier Metals

• NCLAT stay obtained: The company filed an appeal before the NCLAT, which has stayed and kept in abeyance the NCLT's order of admission in its entirety, setting aside the initiation of CIRP against the company.
• Early hearing held: An early hearing took place on October 15, 2026; management is of the "reasonable opinion" they argued well and is "reasonably confident and hopeful" of a judgment in their favour, with the order now reserved.
• No material impact expected: The dispute is a commercial matter of ₹2.79 crores, and management expects no adverse or material impact on financial or business operations.

Niyant Maru: "The company had gone for an early hearing on October 15, which is today, and we are of reasonable opinion that we have argued well on the hearing and are reasonably confident and hopeful that we have a strong case with grounds on merits and the judgment will land in our favour."

Guidance & Commitments

Key Metrics