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Anand Rathi Report
Polycab India Ltd. had a sombre start to FY23. Its Q1 FY23 revenue dipped 31% QoQ to Rs 27.4 billion, though YoY, it rose 48% due to the lower base.
Despite a 280 basis points improvement in the gross margin, the Ebitda margin was 60 bps lower QoQ, as staff costs rose 5% QoQ even as other manufacturing expenses were 12% lower than the quarter prior. With a 24% tax rate, net income dropped 32% QoQ.
Copper and aluminium are key input raw materials for Polycab. Volume offtake in June 2022 slowed amid volatility in commodity prices. Channel partners tend to optimise inventory to avoid being loaded with high-cost stocks amid falling commodity prices.
Based on that, management expects the pace of revenue booking to be dull in Q2 FY23. It expects volume growth, a key monitorable, to be steady in H2 FY23.
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