- 24 Jan 2022
- ICICIdirect Research
Strong topline growth continues in Q3 for Polycab
POLYCAB - 6813 Change: 69.90 (1.04 %)News: Polycab reported a strong consolidated revenue growth of 23% YoY to Rs.3372 crore led by 25% growth in wire & cable segment while FMEG business grew albeit on a slower pace of 11% due to higher base. EBITDA margin declined by 200 bps YoY to 10.7% (up 100 bps QoQ) due to higher raw material prices and advertisement expenses. PAT from continuation operation came in at Rs.248.1 crore flat on a YoY basis.
Views: Polycab’s wire & cable business witnessed an improved performance on both revenue and profitability front during Q3FY22. However, the FMEG segment witnessed lower EBIT margin of ~2% mainly due to delay in price hikes and higher advertisement expenditure. The company aims to improve profitability of FMEG segment in next 3-4 years through launch of premium products and better operating leverage. Addition to this, company has maintained its FY26E revenue guidance of Rs.20,000 crore (implied revenue CAGR of 18%). We maintain our positive stance on the stock.
Impact: Positive