Polycab India Pvt. recently reported a strong Q2 performance with revenues from operations at ₹4,217.6 crore, showing a 27% year-over-year growth and an 11% sequential increase. The company is moving closer to its targeted annual revenue of ₹20,000 Crore by FY26. Gandharv Tongia, the Executive Director & CFO at Polycab, expressed confidence in reaching this target based on their growth during Q2 and the first half of FY24. Analysts, such as those at Jefferies India Pvt Ltd, estimate that Polycab could achieve the ₹20,000 crore revenue target even earlier, with FY25 revenues estimated at ₹20,537.3 Crore.
The growth of Polycab is driven by initiatives under “Project Leap,” a multi-year transformation program aimed at achieving the company’s growth targets by FY26. Integrating HDC (heavy-duty cables) and LDC (light-duty cables) verticals has been one successful initiative, benefiting both the company and its distributors. Other factors contributing to growth include logo changes, brand positioning, and partnerships with ICC.
In the Fast Moving Electrical Goods (FMEG) segment, the Luminaires business had a strong quarter, thanks to the separate vertical set up under Project Leap. Various other initiatives, such as aligning wires and switches businesses in the same vertical, have also been helpful, though the demand in this segment remains muted due to competitive intensity in the lighting sector and weak growth in appliances.
The company’s largest vertical, the Wires & Cables business, saw a 28% YoY growth in revenue for Q2 FY24, driven by strong volume growth. The government’s “Make in India” initiative, higher government capital expenditure, and a rebound in private capital expenditure are among the factors contributing to this growth.
The revenue from the international business contributed 9.3% of the consolidated revenue during Q2, with the company expanding its global footprint to 76 countries. However, geopolitical factors, like the Israel-Hamas conflict, need to be monitored.
Overall, the second half of the year is expected to be stronger for the industry, with analysts raising earnings per share estimates and anticipating sales and net profit growth driven by higher volumes in infrastructure and housing demand and improvements in the FMEG segment from FY25.