ICICI Securities believe Polycab India remains well positioned to benefit from India's structural infrastructure and electrification opportunity, supported by its market leadership, strong distribution network, and improving execution. Polycab reported revenue/EBITDA/adjusted PAT growth of 52.8%/39.4%/42.6% YoY. Gross/EBITDA/PAT margin contracted 351/139/71bps YoY due to higher commodity inflation. Revenue from exports grew 84.6% QoQ, despite geopolitical disruptions.
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ICICI Securities Report
ICICI Securities believe Polycab India Ltd. remains well positioned to benefit from India's structural infrastructure and electrification opportunity, supported by its market leadership, strong distribution network, and improving execution. Accordingly, the brokerage has maintained Add rating with a DCF-based revised target price of Rs 9,335 from earlier Rs 9,850; implied target P/E of 33 times FY28E EPS).
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The brokerage highlighted that Polycab reported another strong quarter with its highest-ever quarterly revenue in Q2 FY27, supported by strong domestic demand, healthy execution, and improving business mix. Takeaways:
- Domestic Cables and wires (C&W) business grew 50% YoY.
- Wires continued to outperform cables, with wires volumes growing in the early double-digits, compared with mid-single-digit growth in cables.
- FMEG delivered a significant improvement in profitability, supported by strong growth across all product categories, premiumisation, and better scale. It registered double-digit FMEG EBIT margin of 10.1% in Q2FY27 for the first time.
- Exports' contribution to revenue grew QoQ from 3.3% in Q1 FY26 to 5.0% in Q2 FY27 despite geopolitical disruptions.
- It maintains a healthy cash position of ~Rs 4,500 crore (+53.6% YoY), even after capex of ~Rs 290 crore in Q2 FY27.
- Project Spring continues to progress as planned, with investments in capacity, distribution, and innovation supporting the company's long-term growth ambitions.
Polycab Q2FY27 result review
- Polycab reported revenue/EBITDA/adj. PAT growth of 52.8%/39.4%/42.6% YoY.
- Gross/EBITDA/PAT margin contracted 351/139/71bps YoY due to higher commodity inflation.
- Revenue from exports grew 84.6% QoQ, despite geopolitical disruptions.
- Average net working capital days stood at ~11 days due to higher payable days and are expected to normalise to 45–50 days in the coming quarters.
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