- 20 Jul 2022
- ICICIdirect Research
Polycab posts Q1FY23 numbersPOLYCAB - 2823 Change: 4.40 (0.16 %)
News: Polycab's consolidated revenue increased by ~48% YoY at ~Rs 2737 crore led by similar growth in the revenues of wires & cables business to Rs 2406 crore respectively. The FMEG segment revenue rose 61% YoY to Rs 308 crore. The gross margin increased ~150 bps YoY (280 bps QoQ) mainly led by price hikes. The EBITDA margin increased 415 bps YoY to 11.4% supported by savings in employee cost and other expenses. PAT came in at Rs 222 crore up 202% YoY led by strong topline growth in Q1FY23 along with recovery in EBITDA margin.
Views: We believe the wire and cable industry contributed significantly to the revenue growth in Q1FY23, together with robust growth in the B2C segment and a rebound in demand for B2B products following the opening up of the economy. Price hikes and changes in the product mix led to an improvement in the gross margin, which, in turn, helped the EBITDA margin return to its pre-Covid level. Although we remain optimistic on the stock, we await management commentary on the demand forecast and anticipated future inventory loss caused by the steep decline in copper prices.