Speaker #1: Good evening to everyone, and thank you for joining us. I hope all of you are staying healthy and gearing up for the upcoming festive season.
Speaker #1: On this call, we shall discuss a Q2 FY27 results which were approved in the board meeting held earlier today. We will be referring to the earnings presentation, financial results, and financial statements which are available on the stock exchanges as well as on the investor relations page of our website.
Speaker #1: Joining me today from the management team we have our joint managing director, Mr. Nikhil Jayasangani, and head of investor relations, Aditya Nathani. Let me now hand over the call to Nikhil for his comments.
Speaker #1: Over to you, Nikhil.
Speaker #2: Thanks, Niyant. Good evening, everyone. As we conclude the first half of FY27, I am pleased to share that Polycab has delivered its highest-ever quarterly and half-yearly revenue and profitability.
Speaker #2: This performance underscores the resilience of our operating model, and the strength of disciplined execution across the organization. The wires and cables business continues to deliver robust growth, supported by healthy demand trends, strong market positioning, and consistent execution.
Speaker #2: The FMEG segment continued to strengthen its growth trajectory, and recorded its 7th consecutive profitable quarter. Across the organization, we remain focused on execution excellence, translating strategic priorities into tangible outcomes while building a stronger foundation for sustainable long-term growth.
Speaker #2: Encouragingly, the initiatives under our strategic roadmap, project Spring, are progressing in line with plan and are already beginning to lead meaningful results reinforcing our confidence in both the strategy and our ability to execute it effectively.
Speaker #2: As we look ahead, our priorities remain firmly anchored on sustaining growth momentum, further enhancing our competitive advantages and investing in innovation, talent, and capabilities.
Speaker #2: With a strong foundation in place and clear strategic direction, we are well positioned to capitalize on emerging opportunities and create enduring value for all our stakeholders.
Speaker #2: With that, I would now like to hand over to Niyant.
Speaker #1: Thank you, Nikhil. While the global macro-environment remains volatile during the quarter, we continue to believe that India remains one of the most compelling structural growth stories globally.
Speaker #1: Geopolitical tensions elevated energy prices, higher global quant yields, and disruptions across certain international shipping routes have created near-term uncertainty across markets. However, India continues to navigate and grow, supported by strong domestic demand, healthy investment activity, accelerating infrastructure creation, and increasing manufacturing competitiveness.
Speaker #1: The IMF, in its latest outlook, has raised India's growth outlook by 60 basis points, despite higher global energy prices citing stronger economic momentum, robust services activity, and sustained domestic demand.
Speaker #1: This confidence is reflected in the recent upward revisions to India's growth outlook by several other global agencies, domestically GDP growth for Q1 FY27 came in at 7.8%, underscoring the resilience of the economy despite an increasingly uncertain external backdrop.
Speaker #1: Global monetary conditions remain tight, as central banks continue to combat inflation, resulting in higher policy rates and bond yields across major economies. In India, the monetary policy committee (MPC), unanimously raised the repo rate by 25 basis points to 5.5% and shifted the policy stance from neutral to calibrated tightening.
Speaker #1: Implying interest rate cuts are not anticipated in the near term. While the external environment remains challenging, India's strong domestic demand, robust banking systems, and sustained infrastructure investment continue to underpin the economic resilience.
Speaker #1: What gives us confidence is the breadth of growth visible across the economy. GST collection continued to remain healthy, growing by 15% year-on-year in July-August, government capital expenditure remains significantly at higher levels, and bank credit growth continues to trend close to 15-20%.
Speaker #1: Power demand has remained robust, reflecting healthy activity across industrial, infrastructure, and commercial sectors. The focus on infrastructure development continues which is reflected in the government capex trend of spend of 5.10 lakh crore during April to August 2026, implying an 18% year-on-year growth.
Speaker #1: The government has also approved another 1.9 lakh crore of capital outlay for green corridor phase 3, which includes evacuation of 135 gigawatts of renewable energy and deployment of battery energy storage systems.
Speaker #1: All of this signals strong economic activity in India over the medium to long-term period. This structural growth drivers continue to reinforce the long-term opportunity outlined under the project Spring.
Speaker #1: While the near-term inflationary pressures are surfacing due to macroeconomic situations, both urban and rural demand continues to remain healthy, while government support measures are expected to aid broader consumption growth going forward.
Speaker #1: Importantly, India's revenue base remains predominantly domestic, which provides a degree of resilience in periods of global uncertainty. Continuing on the momentum, the company delivered yet another remarkable quarter of strong performance, underpinned by healthy revenue growth and profitability.
Speaker #1: Our performance reflects not only favorable demand conditions but also the deliberate investments and strategic choices made over the past several years. The wires and cables business continued to be positive momentum, leveraging its market leadership and execution capabilities, while the FMG business has outperformed the markets across categories supported by a growing product portfolio and a wider customer reach.
Speaker #1: The progress we have achieved is underpinned by strong execution, across our strategic priorities and continued investment in our growth platforms. We remain committed to operational excellence, disciplined capital deployment, and creating greater value for our stakeholders and customers across every touchpoint.
Speaker #1: Looking ahead, we see significant opportunities across our markets. Our priority will be to accelerate our growth initiatives, strengthen our brands, deepen distribution, and build the innovation and talent ecosystem needed to support the next phase of expansion.
Speaker #1: To sum up, our outlook remains unchanged. While commodity volatility geopolitical developments and logistics-related disruptions may continue to influence individual quarters, the structural drivers of the demand remain firmly intact and in place.
Speaker #1: We remain focused on disciplined execution of our project Spring strategy, strengthening our market leadership position, and investing behind the significant long-term opportunities emerging across infrastructure, energy transition, manufacturing, urbanization, and exports.
Speaker #1: Now we would like to update you with reference to the ongoing proceedings with respect to Asia Metals that we have filed an appeal before the Honorable National Company Law Appellate Tribunal.
Speaker #1: Principal Bench New Delhi and the Honorable NCLAB has stayed and kept in abeyance the order of admission in its entirety. Including that of it being a commercial dispute of INR 2.79 crores to set aside the order of admission passed by NCLT and initiation of the corporate insolvency resolution process CIRP against the company.
Speaker #1: The company had gone for an early hearing on October 15, which is today, and we are of reasonable opinion that we have argued well on the hearing and are reasonably confident and hopeful that we have a strong case with grounds on merits and the judgment may land in our favor.
Speaker #1: We continue to monitor the situation and follow the due process as per law to get this resolved as quickly as possible. We do not expect any adverse or material impact on our financial or business operations arising from the site situation.
Speaker #1: I would now hand over to Aditya to take you through the financial performance for the quarter.
Speaker #2: Thank you, Niyant. For the quarter-ended September 30th, 2026, we delivered an exceptional performance reflecting the strength of our diversified business portfolio, disciplined execution, and sustained demand across our end markets.
Speaker #2: Consolidated revenue grew by 53% year-on-year with all business segments contributing meaningfully to this growth momentum. The company continued to maintain a strong operational performance during the quarter, EBITDA increased by 39% year-on-year while EBITDA margins expanded by more than 50 basis points sequentially to 14.4%, supported by a favorable business mix and continued focus on operational efficiencies.
Speaker #2: Profitability remained robust, with profit after tax reaching a record high of rupees 9,900 million representing a 43% year-over-year increase. Packed margins stood at 10% for the quarter, reflecting healthy earnings growth and sustained margin resilience.
Speaker #2: Our financial position remains very strong, net cash stood at 45.2 billion as of September 30th, 2026, compared to rupees 29.4 billion a year ago.
Speaker #2: We also witnessed a further improvement in our working capital efficiency with the average working capital cycle reducing to approximately 11 days in second quarter fiscal 27.
Speaker #2: This was aided by higher payable days arising from the increased use of letters of credit for our raw material procurement. As these benefits gradually normalized, we expect the working capital cycle to trend towards our long-term operating range of 45 to 50 days.
Speaker #2: During the first half of the year, we incurred capital expenditure of rupees 6.1 billion reflecting our ongoing investments in capacity expansion, supply chain capabilities, and future growth platforms.
Speaker #2: On a half-year basis, I am pleased to share that H1FY27 marked the strongest first half performance in the company's history in terms of both top-line and profitability.
Speaker #2: Revenue grew by 46% year-on-year crossing a significant milestone of rupees 180 billion. EBITDA increased by 36% year-on-year with margins remaining healthy at 14.1%. While profit after tax grew by 38% year-on-year translating into packed margins of 9.9%.
Speaker #2: Let me now turn to slide 6 and discuss the performance of our wires and cables business. The wires and cables segment delivered a strong quarter, recording 47% year-on-year revenue growth.
Speaker #2: Within this, the domestic wires and cables business grew by an impressive 50% year-on-year driven by healthy demand conditions strong channel execution and favorable commodity-linked realizations.
Speaker #2: We delivered a volume growth of mid to high single-digit range on top of a strong base from the corresponding quarter last year. Demonstrating the underlying strength of demand.
Speaker #2: Within the portfolio, wires continued to outpace cables in terms of growth. Channel sales also grew faster than institutional sales. Underscoring the resilience and effectiveness of our distribution-led model.
Speaker #2: From a regional perspective, the West remained our largest contributor, followed by the South, North, and East, highlighting the broad base nature of growth across markets.
Speaker #2: Despite challenging geopolitical environment, exports picked up strongly during the quarter as sales grew 17% year-on-year and grew 85% quarter-on-quarter. While exports accounted for a relatively lower share of overall revenues, the moderation in contribution is largely attributable to the significant faster growth in the domestic market.
Speaker #2: With expanded the overall revenue base. We continue to maintain a strong export order pipeline and remain confident about our long-term growth prospects of this business.
Speaker #2: EBIT margins in the wires and cables segment stood at 14.2%. Margins improved sequentially supported by a favorable product mix and continued operational excellence initiatives.
Speaker #2: In line with our project spring roadmap, we remain confident of sustaining medium to long-term EBITDA margins within our guided range of 11 to 13%.
Speaker #2: Turning now to slide 8 and our FMEG business. The FMEG segment delivered a breakthrough quarter registering a remarkable 124% year-on-year growth with strong performance across all major product categories.
Speaker #2: Notably, this marks the 11th consecutive quarter of industry leading growth, reflecting the effectiveness of our strategy execution capabilities and strengthening market position. Solar products, which constitute the largest category within our FMEG portfolio, continued to be the primary growth driver, registering multi-fold growth during this quarter.
Speaker #2: The segment continues to benefit from favorable structural tailwinds, including the PM Suryaghar Yojana various state-level support programs and accelerating consumer adoption of renewable energy solutions.
Speaker #2: We remain highly optimistic about the long-term opportunity this category presents. The broader FMEG portfolio comprising fans, lighting, switches, switchware, conduct pipes and fittings, also delivered healthy growth.
Speaker #2: Performance was supported by sustained momentum in the real estate and construction sectors, alongside our focused efforts on product innovation distribution expansion and deeper customer engagement.
Speaker #2: The segment also achieved a major profitability milestone with EBIT margins crossing the double-digit mark for the first time and recording a 10.1% margin during the quarter.
Speaker #2: Since achieving profitability in Q4 FY25, the business has consistently strengthened its earning profile while continuing to invest in talent, product development, innovation, and brand-building initiatives.
Speaker #2: Looking ahead, we remain highly confident about the long-term growth trajectory of the FMEG business. Our objective continues to be growing at 1.5x to 2x of the industry growth rate while steadily enhancing profitability.
Speaker #2: Investments in distribution reach, product innovation, category expansion, and brand equity will remain central to driving sustainable value creation. Moving to slide 10 and our EPC business.
Speaker #2: The EPC segment reported revenues of rupees 6,171 million in Q2 FY27, representing a healthy year-on-year growth of 53%. Segment profitability remained strong at rupees 444 million translating into an EBIT margin of 7.2%.
Speaker #2: Over the medium to long term, we continue to expect sustainable margins for the EPC business to remain in the high single-digit range. Supported by disciplined project selection, efficient execution, and a healthy order pipeline.
Speaker #2: In closing, I would like to sincerely thank all our stakeholders for their unwavering trust and continued support. The performance delivered during the quarter reflects the strength of our business model the commitment of our teams and the success of our long-term strategic investments.
Speaker #2: As we look ahead, we remain focused on executing our growth priorities enhancing operational excellence and creating sustainable value for all our stakeholders. With that, we conclude our prepared remarks and would be happy to take your questions.
Speaker #1: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone.
Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question.
Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Kevin Shah with Aditya Bellamani.
Speaker #1: Please go ahead.
Speaker #3: Yeah, hi sir. Thanks for the opportunity and congratulations on our great set of numbers. So firstly, on the FMEG margins, if you see the 10.1% already at the upper end of your project targets, so could you highlight what are the key drivers behind it and which of these segments are profitable?
Speaker #3: Is it made solely contributed by the solar segment? And would you be looking to revise your project spring targets?
Speaker #2: Of course. Yeah, thank you Kevin for your question. For the FMEG margin question, I think there are a few things that have worked for us in this quarter and probably the kind of initiatives that we have put together over the past few years and those strategies are actually reaping benefits.
Speaker #2: Now, definitely scale has increased in this quarter and as I mentioned in my previous comments, all segments in the quarters have actually grown you know why by multifolds, right?
Speaker #2: Beating the industry growth rates. So that's very much you know a positive sign for us that all the categories are firing at all cylinders with kind of the strategies that we are implementing.
Speaker #2: So that's the first part. I think I think the scale definitely plays an important part and definitely the operating leverage from here. The second part, I think to answer to that margin expansion of you know to 10.1% is premium mix has also gone you know increased in this quarter for various segments.
Speaker #2: Today if you see the fans mix is around 33% in the premium category and the lights also now reaching at 38%. So all of this is actually contributing to the margin you know growth.
Speaker #2: And the other strategic thing that we have been doing in this segment for past a year or so is providing a more solution-driven approach for our portfolio, right?
Speaker #2: So today if you see we have been you know as we have already mentioned previously in various calls that the kind of strategy that we are putting together especially in terms of the building building verticals you know these FMEG products are actually complementing to the way we are approaching the end customers, right?
Speaker #2: So it's a kind of bouquet offering that we are doing and it is reaping benefits for us, right? So I think there's a scale that is why you see the kind of margins that we have generated in FMEG.
Speaker #2: So all these strategies together is is reaping benefits because if you see earlier also our strategies was largely on Pan India basis, right? Today the strategy has moved regional specific and given the kind of P&L strategy that we have for each you know that is driving a lot of you know profitability you know the availability of the products in the market has has improved you know various strategic initiatives that we have implemented our Poly Ratna plans that we have put together in the market is also sort of complementing to this.
Speaker #2: So I think so all of this synthesize is getting us the results for FMEG. To answer to your second question on the growth, I think when we started the project spring and we laid out our margin profile, I think it's for FY30, right?
Speaker #2: So over the longer term we believe we would end up in that kind of a range of 8 to 10% of the EBITDA margins.
Speaker #2: Today we are already at an EBIT margin of 10.1% which is very high. I would I would believe we would appreciate the kind of efforts that we have put together to get this segment turn around in the way we have you know we have seen the results in this quarter.
Speaker #3: Understood. And just a follow-up on the margins too in for wires and cables margins also there has been a significant increase there. So can we say that this is mainly led led by the channel mix improvement and on what are the other drivers and how much of it do you see it as sustainable given the potential increase in the competition in the distribution channel?
Speaker #2: So Kevin, I think that's when you look at the margins overall, I think it's a confluence of five things that we have already highlighted in the previous calls.
Speaker #2: It's definitely operating leverage has a play into it. If you see our margins overall margins have expanded around 90 basis points sequentially. So there is there is the operating leverage that is playing into this sector, right, in this segment.
Speaker #2: Definitely the business mix is playing an important part. Wires have grown far more better than the cables. So that's a higher creative margin business for us.
Speaker #2: Definitely channel has also been better than institutional. So these these are four five things that are very important and if you see the kind of exports you know growth that we are also having that is also sort of supporting to a certain extent.
Speaker #2: So I think we are we are very much happy the way we have delivered you know the kind of initiatives that we have put together and it is visible in the results at the moment and 14.4% overall margins we have wires and cable that 14.2% it's it's it's a remarkable story Kevin.
Speaker #3: Understood. And secondly in terms of the potent of the new supplier that is coming into the market. So do you what is the downside or is it that you see to your project spring targets?
Speaker #3: In terms of the growth as well as margins?
Speaker #2: So Kevin you need to understand that this the guidance that we have provided is for FY30, right? So it's a it's a CAGR approach that we have taken in terms of formulating these growth rates, right?
Speaker #2: So you may see in some years you will find the margins have actually gone in the high single digits. Some years you may find it at a very high margins.
Speaker #2: There's no double digits. So I think we would like we would like to be in that guidance range I think till FY30 and that's how we continue to maintain our stance of our guidance.
Speaker #3: Understood. Yes. Thank you so much for being for your answers and and for.
Speaker #1: Thank you. Ladies and gentlemen, in order to ensure that a management is able to answer questions from all participants, please limit your questions to two per participant.
Speaker #1: The next question comes from the line of Sonali with Jeffrey's India. Please go ahead.
Speaker #4: Thank you for the opportunity and congratulations on a very strong set of numbers. So my first question is in cables and wires domestic you have grown 50% overall you have grown 47% revenues year mark what could be our volume growth and what could be our value growth for that?
Speaker #2: Thanks Sonali for this question. I think in terms of the volume growth I think as I alluded in my previous comments that cable and wires definitely has done you know has grown really strongly for us in this half as well.
Speaker #2: In terms of the volume growth I think overall volumes have grown by mid to high single digits. Breaking down into the cables and wires segment I think wires have grown in early early double digit growth in terms of the volume and cable has been in the mid single digit.
Speaker #2: So so that's the kind of breakdown that we have in terms of the volume.
Speaker #4: So that's a great number considering our base of last year was very strong.
Speaker #2: Yeah. I mean thanks for you know highlighting that. But I would like to reiterate the fact that last year you know it was a very very very strong base, right?
Speaker #2: It was 18% volume growth and cables have actually grown around 20%. So I think on top of it you know we are growing at that kind of a growth.
Speaker #2: It's it's it's we are very much happy.
Speaker #4: Great. So my second question is regarding your commentary on the IBC you know hearing today. So please correct me if if I am wrong in my understanding but today there was only argument, right?
Speaker #4: So the final outcome is not yet out. So do we have a next hearing date?
Speaker #2: Just to give I think a clarity I think the our the entire case has been heard today and now probably we have to wait for the actual order which has to come.
Speaker #2: So we will leave this matter you know here we expect the order to be announced you know in whatever time I think it takes by them.
Speaker #2: Sooner the better you know.
Speaker #4: Understood. So no completed and the order
Speaker #2: is reserved.
Speaker #4: Understand. So any timeline or you know we we'll just leave it to the time that they require.
Speaker #2: I would not like to hazard a guess on the timeline but obviously as a company we would you know certainly you know do the best to see how fast we can get the order.
Speaker #2: It's it's definitely it's something which we will be focusing on.
Speaker #4: Absolutely sir. Very clear. Thank you for the replies and wish you all the best for the festive season ahead as well.
Speaker #2: Thanks everyone. Thank you.
Speaker #1: The next question comes from the line of Umang Mehta with Kotak Securities. Please go ahead.
Speaker #5: Hi. Thanks for the opportunity and congrats on a strong quarter. My first question was again on margins. You've done 15% ballpark EBITDA margin in wires and cables in the first half.
Speaker #5: Now I understand there went to 13 is your long-term guidance. But from a second half or a more one-year perspective how are you looking at profitability?
Speaker #5: And also if you can share some comments on the new entrant and what how are you kind of approaching or maybe looking to defend our shares?
Speaker #5: Yeah. Thanks.
Speaker #2: Sure. Thanks Umang. I think as I mentioned earlier you know when you look into the margins I think there are it's it's a concerns of four five things that combine together.
Speaker #2: You know your your channel has to grow more than your institutional business. Your wires has to grow more than your cables. Right? And that's how so the mix plays a part here and definitely in this quarter we have seen some kind of an operating leverage that has come into play.
Speaker #2: You would also note the fact that you know copper prices have also been very high of late in this quarter as well. So that's also kind of helping you know us to sort of get the on an absolute basis right the values on an absolute basis.
Speaker #2: So I think overall I think we are happy with the kind of margins that we are generating. Second half also looks very promising and the it's largely driven through the kind of demand that we're seeing right now.
Speaker #2: We are seeing healthy growth in the second half as well and based on that I think we the kind of initiative that we are putting together as a as a group in terms of each categories are eating benefits for us.
Speaker #2: So I think we will continue to operate at a level we would be happy to you know operate at a higher end of the guidance that we've given but as you know Umang there there are different seasonalities there are different periods of years where fluctuations will happen and that is the reason why we stick to our long-term guidance for FY30.
Speaker #2: Now coming to your question on the competition you know Alta Tech's entry I believe that's the peer that you have been referring to. So so so the entry into a particular category of wires market is today is a very small portion of our overall business right?
Speaker #2: If you see the overall cable and wires business the market is roughly around 1.1 lakh crores right? And wires is roughly around 30% of that market.
Speaker #2: Even in that market 30 to 35% is still unorganized. So there is there is enough room and the kind of growth that we're seeing in this segment there is enough room for few players to come and you know take some pie of this year.
Speaker #2: But however we don't see any real competition in the near term simply because you know that wires market is still very small part of our overall business and the heat is on the ones who are wires heavy.
Speaker #2: So our for us any which way is operating at a very high margins. So I think if you look at the overall industry the market is also going to grow grow in the next two to three years to around maybe 40 50,000 crore and with that you know the kind of capex that Alta Tech has put into this industry the kind of revenue guidance that they have given close to around potential of around 6 to 7x you know it's it looks elusive at the moment but I think that again is a very you know small part of the overall market.
Speaker #2: So I think I think we will wait and there is an execution playover here and we we definitely acknowledge the big house and its capability we will continue to sort of closely watch our competition as we have always done and if you if and just to highlight that over the past every year you know we have already gained market share around 1 1% every year.
Speaker #2: Last year only we you know gained 3 to 4% point. So I think we are doing the right things in the market. We are you know tapping the right spaces and then I think that's how we are going to approach as part of our project spring.
Speaker #5: Understood. Just a follow up. So fair to say there's no action in terms of pricing or anything from your end yet right in response to.
Speaker #2: I think as of now. We are moving ahead with our plans. So yeah.
Speaker #5: Sure. Sure. Got it. And just one second one was on two growth markets. One was exports. Any outlook from a full year growth perspective?
Speaker #5: And second one was on data centers. So OFCs there's a big opportunity there. So anything you are looking to do on that side? Yeah.
Speaker #5: Thanks.
Speaker #2: Yeah. I think Umang would view that pointed out that you know exports is a very you know an end of untapped market for India per see right?
Speaker #2: And it's a very important growth driver for us. It is doing exceptionally well for us. It is just that the geopolitical situation has dented some of the you know bookings for us and obviously there has been issues with the supply chain globally where shipping lines have actually you know moved ahead 10 to 12 days.
Speaker #2: So that's a kind of impact we are seeing. But if you look at our numbers you know comparing with quarter one and what we have achieved in quarter two we have gained around 25% increase in our quarter to quarter growth right?
Speaker #2: So we we are pretty much confident that we have a very strong order book in place big markets for us US Europe LATAM Asia all are contributing significantly to us right?
Speaker #2: And if you see last year today I think I think today we are at 94 countries right? Last year we added around 10 countries in our portfolio.
Speaker #2: So we have a very diversified base in terms of our exports. So I think today I think Chile probably I would like to highlight that Chile was one of the countries that also contributed this time in our export revenue.
Speaker #2: So last quarter if you see Oman Saudi had contributed significantly to our Middle East mix. So I think that's very you know encouraging to see that we are getting all kinds of demand from these economies and countries so we are very happy with the kind of growth that we are seeing in exports and we are very much confident with the kind of pipeline order book pipeline that we are have having exports is certainly going to pick up from here.
Speaker #2: I mean obviously there is a risk element of Mr. Trump but yes I think I think we are very much you know very confident on the grow growth prospects.
Speaker #2: Now sorry I mean coming up on the data center thing I think if if you see I think data center definitely is a big market and a very big opportunity for everyone to crack right?
Speaker #2: We are as we have already highlighted that we are working towards this segment as well our Innotion R&D team continuously works to find the right products and as you are aware we are any which way supplying the conventional part of the data center right?
Speaker #2: Today if you see the market is around 1.6 1.7 gigawatt of capacity in data center right? Some reports have suggested it would go to 8 to 10 some probably 15 gigawatts.
Speaker #2: So there are a lot of announcement that is happening both in terms of the private and you know in terms of the government side as well.
Speaker #2: But we will need to see the kind of execution that will happen yes there are some pockets in the regions where private capex is adding you know getting added in different regions with 10 megawatts 50 megawatts but I think data center is a very big opportunity for us.
Speaker #2: So I think we are we firmly believe the kind of capabilities and the distribution network and the kind of product portfolio that we have we will certainly be able to sort of capture that market in sooner.
Speaker #5: Sure. Okay. Thank you so much and all the best.
Speaker #2: Yeah. Thank you.
Speaker #1: The next question comes on the line of Ashish Kanodia with City. Please go ahead.
Speaker #6: Oh, yeah. Thank you for the opportunity. The first question is on the full year volume growth. How should we think about it? Because you know second half especially if you look at the 3Q base that's very high.
Speaker #6: So from a you know volume growth perspective do you expect more like a you know mid to high single digit volume growth on a full year basis and within that most likely you know 3Q could be slightly soft and then 4Q benefits because the base will also be lower.
Speaker #2: Yeah. I think Ashish you are rightly pointed that Q3 definitely last last year last quarter we we had a very high base right around 40 45% of growth that we registered in last year.
Speaker #2: So that base is going to be high in three third quarter. But when you look into the volume growth I think it's it's not right to look it in a sequential basis.
Speaker #2: What we have called out already as an anchor to look into the volume growth is that whatever the market grows we will do 1.5x of that in cables and wires.
Speaker #2: Right? So if the market if you look at the GDP print recently it's 7.8% growth. If that kind of market continues you know the wires and cables definitely is going to grow at around 12 13% and we will do 1.5x of that.
Speaker #2: So that's a long-term way of looking into the volumes. I think you should also look at more on a 10 to 12 month basis.
Speaker #2: I think quarter to quarter is not the right way to think about it but so if you look into the 12 months trailing basis we still I think believe we are doing a reasonable sort of value you know volume growth over here.
Speaker #6: Sure. And second question on the EPC side of the business I think you know last time you shared that overall I think you know for BharatNet maybe 800 to 1000 crore and maybe RDSS 800 to 1000 crore execution this year just wanted to check is are we still you know working with the same number or do you think that execution might improve as we might do better than what we have guided earlier?
Speaker #2: So I think you see the EPC the nature of EPC business is like you know it's all milestone based right? So we will continue to sort of getting getting orders in terms of the two projects that we are doing in terms of BharatNet and RDSS.
Speaker #2: So I think EPC remains in a similar order book profile roughly the order book I would say it is close to around 9000 10,000 crore.
Speaker #6: Got it. Got it. And just last one between wires and cables anything to highlight here like you know what led to wires kind of outpacing cables because from a underlying demand point of view of course you know you see more you know at at a macro level the demand driver are much stronger for cables so was it largely just because of maybe some inventory stocking at the channel level or was there any other reason why you know like cable relatively grew slower than wires?
Speaker #2: So Ashish I think the growth is largely coming from the demand that we are getting from the different manufacturing and the other mobility side of the space as well.
Speaker #2: You know real estate market continues to be strong. It's not slowed down to that extent. If you see today's year over number in terms of the launches it's still a 4% as per the latest numbers right?
Speaker #2: So today we are serving the real estate market demand of 2024 right? 3.8 lakh units were sold and launched during that time a similar number we saw last year as well.
Speaker #2: So I think real estate market which takes major chunk of our manufacturing end market is reasonably strong and what happens is that you know you also should look into the fact that there is the government is also putting a lot of initiatives and schemes in the manufacturing sector right?
Speaker #2: If you see the eight pay commission is yet to come you know that is yet to sort of add another layer of demand towards that because when that's that's when the housing affordable housing picks up and that's historically has been the case.
Speaker #2: So I think there's a lot of demand that is there in the real estate market as well. And so wires are actually you know contributing to that side as well.
Speaker #2: And it is very difficult to quantify the end market for a cable and a wire business simply because I think some of the wires also act as an ancillary to the cables right?
Speaker #2: It also goes to various different industries. So so I think overall demand remains very very very much healthy and strong and that is the reason we are seeing this kind of numbers in our quarter.
Speaker #6: Sure. Sure. That's that's helpful. Thank you and all the best.
Speaker #2: Thanks.
Speaker #1: The next question comes on the line of Achal Lohade with Umama Institutional Equities. Please go ahead.
Speaker #7: Yeah. Good evening. Thank you for the opportunity. Congratulations on excellent show. Two questions. First you know with respect to the institutional segment you know while obviously most of our sales are through the distribution channel but are you seeing any any delay in offtake given the substantial increase QOQ we have seen in copper aluminium prices?
Speaker #7: Has that been the case and how how are you seeing the impact of the sharp decline in aluminium price in last two weeks?
Speaker #2: No I think Achal we are not seeing any significant movement with that respect because if you see copper prices have only gone up 6% quarter to quarter right?
Speaker #2: And aluminium is actually come down. So whenever that happens you know there will be a restocking and a restocking event. Whenever these copper prices will increase restocking will happen.
Speaker #2: And usually what will happen is that we will pass it on to the end customer for cables we do it in a month and for wires we do it every fourth night.
Speaker #2: So that is that is the only play over here and I think I think we we have not seen any significant pickup in you know the inventories or channel stocking as of now because obviously copper price is still is relatively at a higher level but we are not seeing any meaningful deviation to what we've seen in this quarter.
Speaker #7: Got it. The second question you know this is on the balance sheet if you could clarify you know we see a a 12.5 billion kind of line item in the cash flow statement if you could you know explain the nature and you know if that is if there is any one off and this will get reversed in coming quarter.
Speaker #2: I think there is no one off as such over there. These are just a part of the kind of the advance payment that we have made towards procurement of some of our inventories.
Speaker #2: So that is the kind of number you are seeing the high number 1200 crores roughly number that you're seeing in the cash flow statement.
Speaker #2: So nothing nothing one off over there.
Speaker #7: Got it. Thanks. I'll fall back in the queue. Thank you.
Speaker #2: Thanks.
Speaker #1: The next question comes from the line of Akshay with UBS. Please go ahead.
Speaker #8: Hi. Thank you for for the opportunity and congratulations on great set. Wanted to understand on the export side in terms of what kind of cables you're seeing more broader acceptability globally from Indian cable manufacturers.
Speaker #8: And if you can distinguish this between LVMB and HV cables and secondly on the revenue like you alluded H2 is also looking strong. So can we assume like the quarterly revenue which which you have achieved in quarter two this revenue run rate is sustainable while next quarter maybe YY volumes base will be high but this revenue run rate is sustainable based on the trends you are looking on the ground right now.
Speaker #2: I think I will take the second part first. In terms of the revenue obviously the copper prices are at a level where you'll always see that will eventually benefit us at our EBITDA level right?
Speaker #2: So if copper price nobody has a view on copper right now. You know there is a global deficit for sure but we per se don't have a view on copper and we never do that right?
Speaker #2: So whatever copper you know prices happen the the good part is that we are not exposed to the kind of volatility that we see right?
Speaker #2: So everything we just work on a cost plus model. So if these copper prices continue to stay at this level the only assumption what I can you know or only conclusion I can give to you is that the demand is very strong that is that that's the reason it's getting absorbed in the market.
Speaker #2: So if copper prices remain at a certain level you know it it's already up around 40 45% on an average throughout this first half of the year right?
Speaker #2: So if this keeps and if you see the actually the copper prices started to 10 10 towards 10,000 12,000 from December 11 November or December last year right?
Speaker #2: So there will be some point where the base will also get you know affected in that. So I think we would not like to guide in terms of the revenue growth per se but it's it's anyone's guess of how copper price is going to be.
Speaker #2: And sorry but part.
Speaker #7: Export what kind of products you're seeing more acceptability in global market?
Speaker #2: So for exports Akshay I think we today we are doing all the conventional part of the cables that we do right? These are all industry based business right?
Speaker #2: So we are doing LV HV MBs as well. So we are the volumes that we share is it's quite reasonable to the mixes towards that right?
Speaker #2: I mean that's the only guide I can give to you because it is very difficult for us to you know guide that what will be the end market right?
Speaker #2: Today the if if US taking US as an example we are working through our market reps right? So there is a certain level of institutional demand play and they have a strong holding into the end markets in the US and the deep pockets they have the demand right?
Speaker #2: So we would not like we would not probably at the end of the day we would not be able to gauge where these cables are actually going but there is a definite demand from data center and AI and energy transformation that is happening in US.
Speaker #2: So that's so these are these are the kind of cables that we are you know pushing towards our institutional business.
Speaker #7: Got it. Thank you.
Speaker #1: The next question comes from the line of Ashish Jain with Macquarie. Please go ahead.
Speaker #3: Yeah. Hi hi. Good evening. Look this is my first question is on you know cable and wire margins like you know in the last two three quarters also with such high copper prices we have been able to maintain margins in 13 14% band but long term we are still holding 11 to 13% range guidance.
Speaker #3: So is that largely on competitive intensity or there's something else there or are we just conservative here? How should we think about it?
Speaker #2: No Ashish Ashish as I alluded in my previous comments you know we we are not taking any initiative as of now in terms of competition per se right?
Speaker #2: We don't need to do that. The only thing guide I can sort of give you that whenever you think on the margins I mean as as I said there's a conference of four five things in place you know there is a there's a kind of mix that plays into the fact every year you may see a mix getting changed right?
Speaker #2: Last year if you see cables outpace wire today what we are seeing is that wires is outpacing cables. So that mix will keep changing and it will play with the margins as well right?
Speaker #2: Exports if you see today it's a very high margin business right? Today as a percentage of our overall revenues it's still at 5% right?
Speaker #2: Early previous quarter last year it was around 6.5% because the domestic demand is high you would see that number you know slightly lower optically.
Speaker #2: But if you see a couple of years back we we did export did actually contribute around 7 to 8% right? So these mix will keep changing and that's why that's the reason why we say we have when when we published our project spring targets we did some simulation around it.
Speaker #2: So if all things come together definitely we will see margins going to north of what we are seeing today. Today in this quarter also and it's a certain amount of operating leverage that we have got our business mix has improved you know the channel has done better than institutional and there is a certain level of premiumization thing that is going which is driving some part of it.
Speaker #2: So right? So I think all these thing combined is getting us this kind of margins. But over the longer term you will always have to look into perspective that it is normalized to a certain level right?
Speaker #2: So that's how that's that's how you should think about it.
Speaker #3: Okay. So an extension of that so in second half also do you think wires could continue to grow faster than cables? Is that our base case expectation today based upon the based upon the trajectory we are seeing as we speak?
Speaker #2: I mean we would not like to give any guidance on that. We have not we never share that kind of a guidance. We have we have to wait to see how demand shapes up in in the in the next quarter.
Speaker #2: So so these will keep changing Ashish. So it's very difficult to say if cables is going to outpace wires in the next quarter or so.
Speaker #2: So I think that's not the right way to think at it. Today in the first half definitely wires have done better than cables but there's a lot of play around it.
Speaker #2: So I think we we can't give you on record that you know on on on the kind of growth in each segment that we see.
Speaker #3: Okay. Okay. Got it. Thank you so much.
Speaker #1: The next question comes from the line of Rabindranath Nayak with Nirmal Bank Securities. Please go ahead. Mr. Rabindranath your line has been unmuted. Please go ahead with your question.
Speaker #4: Okay. Am I audible right now? Yes you are. Thank you. Thank you very much. My question regarding you mentioned that what is the unorganized competition unorganized market in the wire segment currently?
Speaker #4: How so segment?
Speaker #2: So we don't Rabindra we don't really share that kind of a breakdown as per.
Speaker #4: No no I I I'm asking the industry unorganized market right now in the house wire.
Speaker #2: Wires wires market is roughly around 30% of the overall pie. So you can do the math and.
Speaker #4: 15.
Speaker #2: It's 30%. It's 30% of the.
Speaker #4: Okay. 30%. Okay. So our share would be house wire would be 30%?
Speaker #2: We don't give.
Speaker #4: In terms of revenue? Okay.
Speaker #2: So we don't give a breakdown of our market share based on a segment. On a combined basis of cable and wires industry even in the organized market we have given out called out in our annual report that our market share is around 30 to 31%.
Speaker #4: Okay. No that's I agree but you know I'm talking about only the house wire segment that I ask you.
Speaker #2: Rabindra we don't give a.
Speaker #4: Okay. No problem. Thank you very much. Thank you. Thank you. All the best.
Speaker #1: The next question comes from the line of Vidit Trivedi with Asian Market Securities. Please go ahead.
Speaker #4: Hi sir. Thank you for the opportunity and congratulations on great set of numbers. Most of the questions have been answered. Just wanted to check on the EHV side of the business.
Speaker #4: When can we expect it to be commissioned and you know what can when can we expect it to start contributing to the top line?
Speaker #2: Have the time. Thanks Vidit for asking this question. So I would like to take this opportunity to sort of also let the investor community know that in terms of our EHV plant timelines we are expecting the EHV plant to now commission somewhere in FY25 2020 the next year FY28.
Speaker #4: And the the contribution will start.
Speaker #2: Vidit the reason is that the reason it may happen that the the commissioning may start in April. It may start in May. So that's the reason why we are giving you the timeline of the next year of FY28.
Speaker #4: Got it. Got it. Thanks a lot. And this lastly on the competition side. So I you know we went out for a channel check out in the market.
Speaker #4: So the competitors wires have started coming out in the market and they have stretched strategically position themselves at least 10 to 15% lower to all the existing players.
Speaker #4: So what are you picking up from the ground? What's the what are the major areas they're supplying to? You know just initial comments on that.
Speaker #2: So Vidit I think you have your own channel checks and we have our own channel checks and I think that kind of margin what you are referring to probably you know not in terms of class two wires right?
Speaker #2: I mean that's that's the overall essence that I have. Your channel check is different to probably us. We have a larger set of channel checks and the distribution network.
Speaker #2: We are not seeing any any sort of a pricing correction right now.
Speaker #4: Got it. That's very helpful. Thanks a lot and all the best sir.
Speaker #2: Thank you.
Speaker #1: The next question. Comes from the line of Rahul Agarwal with Ikigai Asset. Please go ahead.
Speaker #3: Yeah. Hi thank you so much. Good evening. Just couple of questions. Firstly on you know the solar business which is part of the FMEG.
Speaker #3: Just wanted to appreciate you know growth for this segment a bit better. Firstly you know what what is the type of products Polycab is doing on the solar rooftop side?
Speaker #3: You know if you just explain the nature of the product what are the water items and what are the manufacturing in-house? And second is you know I understand that the salient exact mix is not available which I understand but as you said it's majority of it growth rate is coming from solar.
Speaker #3: There's some bit of sense on the order book on the revenue run rates going forward on solar. Will help us better appreciate what's happening with you know the appliance business which is a fan conduct pipes and engineer business and then you know the balance on the solar side.
Speaker #3: So does these two questions on solar side?
Speaker #2: So so on the first question first part of it Rahul is we are only doing inverters in the solar category. So that's that's largely a trading business for us and this is only that's the only category and the model that we have in our solar business and it is growing multifold to be honest.
Speaker #2: It is a very strong demand in the market and we are getting this segment grow far more far more better in terms of the growth that we are seeing.
Speaker #2: And that is also driving the overall FMEG business. Now to come to a second part of your question is that as I alluded in my previous comments all six categories in the FMEG's business are actually growing significantly stronger today.
Speaker #2: All right. So it is not just one particular segment that is driving the results but all the segments including your lightings your switch gears your fans your pipes and conduits every category is beating the industry growth.
Speaker #2: So I think that's very you know very much very much stronger and that's the kind of turnaround that we have done in this business.
Speaker #4: Just to follow up. So on on solar which is included in FMEG we are just doing bought outs for solar inverters. We are not actually getting into the solar panels or solar rooftop installation.
Speaker #4: Is that correct?
Speaker #2: Yes. As of now we are not doing any manufacturing side of it. Whenever we believe that there is an opportunity out there we would definitely not shy away to do that piece as well.
Speaker #2: But today we are just doing inverters.
Speaker #4: And if you could just give some guidance on you know how should we look at revenue run rates for this business?
Speaker #2: So I think Rahul the kind of growth that we are seeing in FMEG are very much confident that you know we would we would love to do this kind of a level and and we are very much confident that this growth is what we are going to you know increase.
Speaker #2: It's a mix the segments entire mix to our portfolio is certainly going to grow.
Speaker #4: Got it. And just one question for Nikhil. If you could answer. You know on the copper sourcing side I understand Polycab does 100% of imports on copper.
Speaker #4: And globally you know we have been reading reports around copper supply demand mismatches for various multiple reasons. You know where pricing nobody really knows but in terms of your own sourcing plan how would you think with more longer term if you share some thoughts around next three to five year you know we continue to do 100% imports do are we looking at domestic sources and you know how could that impact industry growth in case you know copper is really short of supply into Indian markets for cable and wire.
Speaker #4: So any thoughts around that will really help. Thank you.
Speaker #2: Yeah. So so the only thing that I can sort of guide you towards the fact that you know today we are doing 100% of copper and market dynamics you know suggest today that it's beneficial for us doing this.
Speaker #2: We never know how the mix is going to go in future. Nobody knows the sourcing part of it right? Today if you are sourcing some plant some from some part of the country and that country is shipping lines get disturbed.
Speaker #2: So obviously any any business you would try to navigate. Today we are not seeing any such sort of arrangements. We are happy with the kind of arrangements today we have have in terms of our copper sourcing.
Speaker #2: So today everything is imported right now.
Speaker #4: Okay. Got it. Thank you so much and all the best and wish the team happily happily well. Thank you.
Speaker #1: Thank you. Ladies and gentlemen that was the last question for today. I now have the conference over to Mr. Niyant for closing comments.
Speaker #2: Thank you everybody for you know the questions which you have raised and I hope we have been able to give proper answers. I would also like to wish all of you a very happy Diwali and a prosperous New Year coming ahead and good luck for the season.
Speaker #2: Thank you.
Speaker #3: Thank you.
Speaker #1: Thank you. On behalf of Polycab India Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.
