T4FY21 results update – Polycab India – ICICI Direct
Polycab announced a 100% recovery of its sales during FY21 despite a 50% loss of revenue in the first quarter. Strong pent-up demand and resumption of infra spending after the easing of foreclosure restrictions helped the company cover lost sales. In segment terms, Fast Turning Electrical Products (FMEG) saw strong year-over-year growth of 24% in FY21, driven by new product launches and dealer additions (3,000 in FY21 vs. 1,750 in FY20). Thus, the contribution of segment revenues to overall revenue also increased to 12% in FY21 compared to 9% in FY20. On the wire and cable (W&C) front, Polycab reported a 100% sales recovery in FY21, better than the 86% takeover of KEI Industries. The strong brand and leading position of ‘Polycab’ in the W&C business (22% organized market share) contributed to the rapid recovery. On the margin front, the EBITDA margin improved marginally during FY21 to 13.1% thanks to various cost optimization measures. The balance sheet remained strong with a net cash position of Rs. 906 crore with careful management of working capital. In the long term, Polycab aims to achieve Rs. 20,000 crore in sales from present ~ Rs. 9,000 crore through various strategic initiatives (new product launches in the premium category and expansion into new geographies).
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