Thursday, July 16, 2026 (Time not disclosed)
Event Participants
Executives
2 Niyant Maru, Shashank Yagnick
Analysts
10 Naushad Chaudhary, Akshay Gattani, Sameer Gupta, Aniruddha Joshi, Ashish Kanodia, Achal Lohade, Keyur Pandya, Pulkit Patni, Sonali Salgaonkar, Ravi Swaminathan
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | +39% YoY (absolute not disclosed) | Driven by broad-based growth across Wires & Cables (39% YoY) and FMEG (71% YoY); supported by favourable demand and commodity-linked realizations |
| Wires & Cables Revenue | +39% YoY | Domestic W&C grew 43% YoY; wires outpaced cables, channel sales outpaced institutional; West region led, followed by North, South, East |
| FMEG Revenue | +71% YoY | Tenth consecutive quarter of industry outperformance; solar (largest category) more than doubled YoY; all six categories beat respective industry growth |
| EPC Revenue | ₹308 crores | Down 11% YoY on project timing and milestone-linked execution cycles; EBIT ₹34 crores (11% margin) |
| W&C Volume Growth (domestic) | Low to mid-single-digit YoY | On top of a very strong base (~26% volume growth in Q1 FY26; cables >25%, wires >20%); wires high single-digit, cables low to mid-single-digit |
| EBITDA / Margin | +32% YoY; 13.8% | Margin improved ~70 bps QoQ; operating leverage and business mix support |
| PAT / Margin | ₹797 crores; +33% YoY | Highest ever quarterly PAT; PAT margin 9.7% |
| Finance Costs | ₹80 crores | — |
| Other Income | ₹105 crores | — |
| W&C EBIT Margin | 13.3% | Up sequentially on favourable business mix and operational excellence; within 11-13% Project Spring medium-term guidance |
| FMEG EBIT Margin | 8.0% | In line with Project Spring milestone of 8-10% EBITDA margins by FY30; aided by operating leverage and premium mix |
| EPC EBIT Margin | 11.0% | Above long-term high single-digit expectation; milestone-driven revenue recognition |
| Working Capital Cycle | 15 days | Sharply below 45-50 day long-term range; temporarily aided by higher payable days from LC-based raw material procurement; expected to normalize |
| Net Cash | ₹3,990 crores | Strong balance sheet position |
| Capex | ₹320 crores | Continued investment in capacity building and future growth drivers |
Geographic & Segment Commentary
Wires & Cables (Domestic & International): Domestic W&C grew 43% YoY with low to mid-single-digit volume growth on a strong base; wires outpaced cables, channel sales outperformed institutional, and West was the strongest region. International business declined YoY due to Strait of Hormuz-related geopolitical disruptions, though management maintains a healthy order book and expects a strong recovery on intact underlying fundamentals.
FMEG: Revenue grew 71% YoY, marking the tenth consecutive quarter of industry outperformance. Solar (largest category, but <50% of FMEG) more than doubled YoY on PM Surya Ghar Yojana and state/central incentives; fans, lighting, switches, switchgears, conduit pipes and fittings all delivered healthy growth. EBIT margin stood at 8%, with premium mix rising to ~25% of portfolio (fans 33%, lighting 38%).
EPC (Bharat Net & RDSS): Revenue of ₹308 crores, down 11% YoY due to milestone-linked timing; combined order book for Bharat Net and RDSS stands at ~₹10,900 crores. Fibre for the Bharat Net execution period (2-3 years) is already secured, insulating the company from current fibre price inflation.
Exports: Q1 FY27 mix: North America 45-50%, Europe 18-20%, Middle East 20-24% (Oman, Saudi, UAE). Middle East weakness began in March 2026; footprint now spans 94 countries with 10 new geographies added in FY26, and US, Europe and Latin America order books are described as "very sizable."
Company-Specific & Strategic Commentary
Project Spring Margin Roadmap: Management reaffirmed medium-to-long-term margin guidance: W&C EBIT margin 11-13% (Q1 FY27: 13.3%) and FMEG EBITDA margin 8-10% by FY30 (Q1 FY27 EBIT: 8%), with FMEG targeting 1.5x-2x of industry growth.
Data Centre Opportunity: Installed base of ~1.6 GW expected to grow to 8-18 GW over 5-8 years; 1 MW translates to ~₹3.5 crores of cable demand (50-60% conventional, balance optical fibre), implying a ₹20,000-25,000 crores market. Polycab supplied cables to Vodafone Idea data centres in Mohali, Pune and South India; a dedicated focus area.
T&D & Power Demand: Transmission line additions projected at ~17,000 circuit km in FY27 vs ~15,000 average over FY20-25, with 20,000-21,000 expected FY26-30; 2,000 circuit km already added in April-May 2026. Generation additions reached 55-56 GW in FY26 vs a 1,120 GW target by FY36 (70% renewable); transformer majors' order books run at ~2.5x revenue.
US Distribution Revamp & Export Strategy: US market representative appointments are complete, with a healthy order book and inquiry bank; exports targeted north of 10% of overall revenue by 2030, implying export growth above domestic.
FMEG Premium Mix & Solar: Premium products reached ~25% of FMEG portfolio (fans 33%, lighting 38%), supporting both topline and margins; solar inverter is the largest FMEG category but remains <50% of segment revenue, with category order: solar, fans, pipes & conduits, lights/switchgears/switches.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| W&C Growth | 1.5x of market growth (volume + value mix) | FY26 delivered 18% volume growth; quarterly base effects and commodity-driven stocking cause volatility; assess over 10-12 months |
| W&C EBIT Margin | 11-13% (medium-to-long term) | Q1 FY27 at 13.3%; export contribution and operating leverage are swing factors |
| FMEG Growth | 1.5x-2x of industry growth | All six categories outpaced industry in Q1; solar momentum has 2-3 year visibility on policy support |
| FMEG EBITDA Margin | 8-10% by FY30 | Q1 EBIT at 8%; seasonality (fans, lighting) will create quarterly variation; full-year trajectory is toward the range |
| EPC Operating Margin | High single-digit (sustainable) | Q1 at 11% is above run-rate; milestone-linked recognition causes quarterly swings |
| EPC Revenue (FY27) | Bharat Net ₹800-1,000 crores + RDSS ~₹800 crores | Bharat Net: ₹8,000 crore contract, ₹4,500 crore execution over 3 years; fibre secured for execution period |
| Working Capital | 45-50 days (long-term operating range) | Q1's 15 days was aided by temporary LC-related payable increase; expected to normalize |
| Exports | >10% of revenue by 2030 | US momentum returning, Middle East recovering; 94-country footprint; "uncapped growth opportunity" |
| Pricing | 3-4% price reduction taken in first fortnight of July | Reflects copper/aluminium correction; volume translation expected gradually |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical / Energy Crisis | Strait of Hormuz disruptions and the US-Iran conflict impacted exports (Middle East from March 2026) and drove input cost inflation in H1 2026; oil moderated from April peaks but remains volatile, and tensions resurfaced in the week before the call. Management sees order book recovery but flags near-term uncertainty. |
| Commodity Price Volatility | Copper and aluminium prices plummeted in June (aluminium -18-20%; copper from ~₹14,000 to ₹13,100-13,200), triggering channel destocking and below-expectation June sales; a 3-4% price cut followed in July. Cost-plus model passes costs through but volumes are timing-affected. |
| Competitive Intensity | Management acknowledged "competition jumping into this sector" given visible demand potential; increased capacity and new entrants could pressure pricing or market share over time. |
| T&D Capex Execution Delay | Historical transmission line additions (~14,000-15,000 circuit km avg) have lagged CEA targets; if the projected 20,000-21,000 circuit km average does not materialize, cable demand growth could disappoint. Management cites CEA publications and transformer order books (2.5x revenue) as evidence of real execution. |
| Data Centre Timing Uncertainty | The 8-18 GW potential over 5-8 years is an estimate; if only |
| EPC Milestone Timing | Revenue recognition tied to project milestones caused an 11% YoY decline in Q1 EPC revenue; quarterly misses may recur even with full-year visibility, creating headline volatility. |
Q&A Highlights
Volume Growth & Pricing
- Question: Can you split price hikes vs volume growth YoY, and how will Q2 pricing play out given copper? Also, quantify acceptances/creditors and how interest on acceptances is booked? (Aniruddha Joshi, ICICI Securities)
- Answer: Domestic W&C volume grew low to mid-single-digit on a very high base (~26% combined in Q1 FY26; cables >25%, wires >20%); this quarter wires were high single-digit, cables low to mid-single-digit. No Q2 copper guidance — cost-plus model passes costs through. Working capital of 15 days (vs 45-50 day norm) reflects LC-based procurement, with inventory typically 100-110 days, payables 80-90 days, receivables 20-30 days. (Shashank Yagnick)
- Question: Was there a price cut in the first 15 days of July, and did June-end stocking get deferred in anticipation? (Ashish Kanodia, Citi)
- Answer: A 3-4% price revision was taken in the first fortnight of July; volume translation will be gradual. (Shashank Yagnick)
Channel Stocking Dynamics
- Question: Is there an element of channel stocking in the wire/cable growth, and is stocking suboptimal? (Achal Lohade, Nuvama)
- Answer: Stocking was "below expectation" — copper and aluminium prices plummeted in June (aluminium -18-20%; copper from ~₹14,000 to ₹13,100-13,200), driving destocking; typical healthy Polycab stocking is ~20-25 days given faster replenishment capability. (Shashank Yagnick)
Exports & US Distribution
- Question: Was the export decline largely Middle East-led, and how do you see the coming quarters? Where does the US distribution revamp stand, and what was US export growth? (Sonali Salgaonkar, Jefferies; Achal Lohade, Nuvama)
- Answer: Middle East was impacted from March; Q1 export mix was North America 45-50%, Europe 18-20%, Middle East 20-24% (Oman, Saudi, UAE). US market representative appointments are complete with a very healthy order book and inquiry bank; expects "sizable pickup" in exports in coming quarters. (Shashank Yagnick)
Data Centre & T&D Demand
- Question: What is your view on the data centre and optical fibre opportunity? How are transmission, solar and infra/industrial demand trends? (Sonali Salgaonkar, Jefferies; Ravi Swaminathan, Avendus Spark)
- Answer: Data centre installed base of 1.6 GW could reach 8-18 GW over 5-8 years; 1 MW = ~₹3.5 crores of cables (50-60% conventional). T&D additions should rise to ~17,000 circuit km in FY27 vs ~15,000 average FY20-25, and 20,000-21,000 FY26-30; 2,000 km already added in April-May; transformer order books at 2.5x revenue; BSE 500 ex-BFSI companies committed ~₹11.6 lakh crores of capex over 12-18 months. (Shashank Yagnick)
- Question: Isn't the data centre math small (₹3,500 crores per GW on a ~₹1 lakh crore TAM), and has T&D historically under-delivered vs targets? (Naushad Chaudhary, Aditya Birla Mutual Fund)
- Answer: Management agreed on data centre timing uncertainty but disagreed on T&D — citing CEA's 17,000 km FY27 projection, strong execution (2,000 km in two months), transformer majors' capacity plans, and that ₹100 of T&D spend translates to ~15% cable requirement. (Shashank Yagnick)
EPC / Bharat Net
- Question: Given steep fibre price increases, how will Bharat Net profitability pan out, and why was EPC revenue weak? (Pulkit Patni, Goldman Sachs)
- Answer: Fibre for the 2-3 year execution period is already secured, so no exposure to current fibre price uptick; supply is ~30% of the ₹8,000 crore contract (₹4,500 crore execution piece). EPC is milestone-linked — Q1 dips are timing-related; FY27 guidance: ₹800-1,000 crores from Bharat Net and ~₹800 crores from RDSS; long-term EPC margins high single-digit. (Shashank Yagnick)
FMEG Margins, Solar & Sustainability
- Question: Is the strong FMEG margin operating leverage or gross-margin led? What is solar's scale/sustainability and contribution within FMEG? Is the 8% EBIT a one-off or early delivery of FY30 guidance? (Ashish Kanodia, Citi; Sameer Gupta, IIFL; Keyur Pandya, ICICI Pru Life)
- Answer: FMEG margin improvement is driven by operating leverage on a low base plus premium mix (25% overall; fans 33%; lighting 38%), supported by region-specific product-market strategies. Solar is the largest FMEG category but <50% of segment; category order: solar, fans, pipes & conduits, lights, switchgears, switches; PM Surya Ghar and state incentives provide 2-3 year visibility. Seasonality will cause quarterly variation; full-year ambition is the 8-10% EBITDA range by FY30. (Shashank Yagnick)
FY27 Volume Growth Outlook
- Question: How should we model full-year volume growth given high bases in Q1 and Q3? Is there deceleration after softer industry volumes over recent quarters? (Akshay Gattani, UBS; Keyur Pandya, ICICI Prudential Life Insurance)
- Answer: Two-to-three quarters do not form a trendline; FY26 delivered 18% volume growth and the 1.5x market growth commitment stands. Demand drivers include power/energy security, private capex (₹11.6 lakh crores committed by BSE 500 ex-BFSI), mobility (10,000 km highways annually, 800 Vande Bharat trains by 2030), and emerging data centre, defence and EV charging demand (4-5% today, could "explode"). Management is "not too concerned" about deceleration. (Shashank Yagnick)
Key Takeaway
Polycab delivered a strong Q1 FY27 with consolidated revenue up 39% YoY, EBITDA up 32% to a 13.8% margin (+70 bps QoQ), and record quarterly PAT of ₹797 crores (+33% YoY). Wires & Cables grew 39% YoY (domestic +43%) on low to mid-single-digit volume growth against a very high base, with EBIT margins at 13.3%; FMEG grew 71% YoY — a tenth straight quarter of industry outperformance — with EBIT at 8%, as solar more than doubled and premium mix reached 25%. Management reaffirmed Project Spring guidance (W&C EBIT 11-13%; FMEG EBITDA 8-10% by FY30), 1.5x market growth in W&C, and exports above 10% of revenue by 2030. Working capital improved to 15 days on LC-based procurement, with net cash of ₹3,990 crores. Key watch points include Middle East geopolitical disruption to exports, copper/aluminium volatility driving channel destocking, and the timing of T&D and data centre demand conversion.