PL First Cut – Polycab 3QFY24 Result

PL First Cut – Praveen Sahay – Research Analyst, Prabhudas Lilladher Pvt Ltd

*Polycab 3QFY24 Result First cut: *

(CMP: Rs 4,431| Mcap: Rs 668bn | Rating – Accumulate)

➡️ Revenues grew by 16.8% YoY to Rs43.4bn (PLe: Rs 41.6bn, 4% below) vs in-line with cons. estimates. (Cons.: Rs 43.77bn)

➡️ Gross margins expanded by 130bps YoY to 27%. (PLe:26%)

➡️ EBITDA grew by 13% YoY to Rs5.7bn (PLe: Rs.5.6bn, 2.2% above) vs 6% below cons. estimates (Cons.: Rs 6.1bn). EBITDA margins contracted 50by bps YoY to 13.1% (PLe: 13.4% & Cons. est. 13.8%).

➡️ PBT grew by 13.4% YoY to Rs5.5bn (PLe: Rs5.1bn), higher other income compensated with higher interest cost & depreciation.

➡️ PAT grew by 14.3% YoY to Rs4.1bn (PLe: Rs3.7bn) vs 1.2% below cons. estimates.

➡️ Wires & Cables revenues grew by 16.8% YoY to Rs39.0bn (PLe: Rs36.5bn) on the back of strong volume growth in wires & cables business (Dom. W&C revenue up 16.5% YoY). International business grew by 21.9% YoY contributed 6.2% to its total sales. EBIT grew by 19.2% YoY to Rs5.5bn and margins expanded by 30bps YoY to 14.0%, led by better operating leverage and improvement in product-mix.

➡️ FMEG revenues down by 13.4% YoY to Rs3.0bn (PLe: Rs 3.6bn). losses continue. The decline in FMEG revenue was due to sustained weakness in consumer demand. The YoY de-growth in Fans segment on account of a higher base of the previous year due to stock liquidation activities prior to the BEE transition.

➡️ Others revenues grew by 96.4% YoY to Rs2.5bn. EBIT grew to Rs 394mn and EBIT margin expanded by 390bps YoY to 16.0%.

➡️ Working capital days restricted at 51days in Q3FY24 vs 50days/51days in Q2FY24/FY23.

The stock currently trades at 39x/34x/29x FY24/FY25/FY26 earnings.