Polycab posts record Q1 PAT on 39% revenue growth, cable boom intact
Wires & cables revenue up 39%, FMEG surges 71%, but export weakness and working capital normalization warrant caution
What's new
- Record PAT of ₹7,967 mn, up 33% YoY on 39% revenue growth
- Wires & cables revenue up 39%; volume grew low-mid single digit on high base
- FMEG delivered 71% growth for 10th consecutive quarter, solar more than doubled
- Working capital cycle improved sharply to 15 days, expected to normalize to 45-50 days
Themes from the call
Demand
Domestic wires & cables demand strong, driven by channel distribution; exports declined 13% YoY due to geopolitical impact in Middle East
Margins
W&C EBIT margin at 13.3%, up 70 bps sequentially; FMEG EBIT at 8%, in line with FY30 target of 8-10%
Capital allocation
Net cash of ₹39.9 bn; capex of ₹3.2 bn in Q1; management expects working capital cycle to normalize to 45-50 days as LC payables settle
Guidance watch
- 1.5x market volume growth reaffirmed through FY30
- W&C EBIT margin target of 11-13% through FY30
- FMEG EBITDA margin target of 8-10% by FY30
- Exports to exceed 10% of consolidated top-line by 2030
- BharatNet FY27 execution ₹800-1,000 cr; RDSS FY27 ₹800 cr
- Refused to guide on Q2 copper prices, sequential revenue trajectory, or full-year inflation impact
Risk flags
- Middle East export exposure (20-24% of export mix) remains volatile; geopolitical disruptions could persist
- Working capital normalization from 15 days to 45-50 days could pressure free cash flow in coming quarters
- Management declined to guide on Q2 copper pricing, leaving near-term margin visibility limited
Key quotes
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"We remain confident in our 1.5x market growth guidance through FY30"
— Polycab management
The brief
Polycab India delivered its highest-ever quarterly PAT of ₹7,967 million in Q1 FY27, up 33% year-on-year, driven by 39% revenue growth. The headline masks a quarter where volume growth remained low-to-mid single digit, with price and mix doing the heavy lifting. The wires and cables business grew 39%, but volume was only low-to-mid single digit on a strong prior-year base (Q1 FY26 cables grew 25%, wires 20%). The FMEG division turned in another stellar performance, up 71% with solar doubling, and achieved an 8% EBIT margin — precisely in line with the FY30 target. Management's tone was confident but cautious. On the positive side, the 1.5x market growth guidance through FY30 was reaffirmed, and the working capital cycle compressed to just 15 days thanks to a temporary uptick in LC-backed payables. That, however, is not sustainable. Management expects normalization to the 45-50 day range as the year progresses, which could pressure cash flow. Exports were a sore spot: down 13% year-on-year, with the Middle East — 20-24% of export revenue — hit by geopolitical disruptions. North America and Europe showed healthy momentum, but the near-term export outlook depends on the Middle East stabilising. The EPC segment also disappointed, with an 11% revenue decline due to project timing, though the order book of ₹10,900 crore provides multi-year visibility. On capital allocation, management spent ₹3.2 billion on capex and sits on net cash of ₹39.9 billion. The company refused to guide on Q2 copper pricing or sequential revenue, leaving investors to judge near-term trajectory for themselves. Polycab's core cable franchise is on solid ground, but the export headwind and working capital normalisation are two clouds on an otherwise clear horizon.
Polycab's cable franchise is firing on all cylinders, but the export headwind and working capital normalization are two clouds on an otherwise clear horizon.