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Polycab Posts Poor Q1 FY25 Results Due to Business Mix
Polycab India Limited reports a marginal year-on-year Profit After Tax decline and significant quarter-on-quarter decrease in Q1 FY25, attributed to unfavorable shifts in business mix impacting EBITDA margins and international business.
by Damodharan N
Updated Jul 18, 2024
Table of Content
Polycab India Limited [NSE: POLYCAB, BSE: 542652], a leading player in the wires and cables industry, reported disappointing financial results for Q1 FY25, attributing the downturn to unfavorable shifts in its business mix.
The company recorded a marginal decline in Profit After Tax (PAT) by 0.4% year-on-year (YoY) and a substantial 27% quarter-on-quarter (QoQ) decrease, amounting to ₹4,016 million in Q1 FY25.
Key highlights from the financial report include a 21% YoY growth in revenue, reaching ₹46,980 million, despite a significant 16% QoQ decline. The EBITDA margins contracted to 12.4%, down by approximately 170 basis points (bps), primarily due to a shift towards lower-margin segments.
Polycab noted a challenging period with fluctuating commodity prices impacting demand, particularly affecting its international business, which saw a 28% YoY decline.
The company's Fast Moving Electrical Goods (FMEG) segment, however, demonstrated resilience with a 21% YoY growth, bolstered by strong demand for fans amidst regional heatwaves. Conversely, the lights & luminaires segment faced challenges from pricing pressures and subdued consumer demand.
Polycab's EPC business showed robust growth, with a 292% YoY increase in total income to ₹4,815 million, supported by strong execution of its order book. Despite this, the segment's EBIT margin declined by approximately 150 bps to 11.0%, highlighting ongoing margin pressures.
Looking forward, Polycab remains cautiously optimistic, anticipating improved performance in segments such as wires & cables and FMEG, driven by sustained demand and strategic operational adjustments.
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Polycab Q1 FY25 Results
Polycab released its financial results for the first quarter of FY25, highlighting significant developments across key business verticals amidst challenging market conditions.
Financial Performance:
- Polycab reported a revenue of ₹46,980 million for Q1 FY25, marking a robust 21% year-on-year (YoY) growth, albeit with a 16% quarter-on-quarter (QoQ) decline.
- Profit After Tax (PAT) stood at ₹4,016 million, showing a marginal decrease of 0.4% YoY and a significant 27% QoQ decline.
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margins contracted to 12.4%, down by approximately 170 basis points (bps) due to shifts in business mix towards lower-margin segments.
Business Verticals Performance:
- Wires & Cables: Witnessed an 11% YoY growth in revenue, driven by fluctuating commodity prices impacting demand.
- Fast Moving Electrical Goods (FMEG): Registered a strong 21% YoY growth, supported by robust demand for fans during regional heatwaves.
- International Business: Experienced a 28% YoY decline in revenue contribution, affecting consolidated margins.
- Other Segments (EPC Business): Recorded a substantial 292% YoY growth in total income, driven by efficient execution of the EPC order book.
Consolidated statement
|
Particulars |
Q1 FY25 (₹ Mn) |
% of Revenue |
Q4 FY24 (₹ Mn) |
% of Revenue |
Q1 FY24 (₹ Mn) |
% of Revenue |
|
Revenue from Operations |
46,980 |
100.0% |
55,919 |
100.0% |
38,894 |
100.0% |
|
Cost of Goods sold |
35,415 |
75.4% |
41,792 |
74.7% |
28,581 |
73.5% |
|
Contribution (A) |
11,565 |
24.6% |
14,127 |
25.3% |
10,313 |
26.5% |
|
Employee Cost |
1,539 |
3.3% |
1,696 |
3.0% |
1,349 |
3.5% |
|
Other Operating Expenses |
4,192 |
8.9% |
4,816 |
8.6% |
3,478 |
8.9% |
|
Total Operating Expenses (B) |
5,731 |
12.2% |
6,512 |
11.6% |
4,828 |
12.4% |
|
EBITDA (A) |
5,834 |
12.4% |
7,615 |
13.6% |
5,486 |
14.1% |
|
Other Income |
584 |
1.2% |
538 |
1.0% |
640 |
1.6% |
|
Depreciation |
671 |
1.4% |
657 |
1.2% |
571 |
1.5% |
|
Finance Cost |
413 |
0.9% |
244 |
0.4% |
249 |
0.6% |
|
PBT |
5,334 |
11.4% |
7,253 |
13.0% |
5,305 |
13.6% |
|
Income Tax |
1,317 |
2.8% |
1,718 |
3.1% |
1,273 |
3.3% |
|
PAT |
4,016 |
8.5% |
5,535 |
9.9% |
4,032 |
10.4% |
Polycab India
Polycab India Limited, founded in 1996 and headquartered in Mumbai, is a leading manufacturer and seller of wires, cables, and fast moving electrical goods (FMEG) under the renowned 'POLYCAB' brand.
Over its nearly three decades of operation, Polycab has diversified into various segments including power cables, control cables, and a wide range of FMEG products such as electric fans, LED lighting, switches, switchgear, solar products, and conduits & accessories.
The company operates 25 manufacturing facilities across India, including joint ventures for specialized products like LED lighting and copper wire rods. With a strong emphasis on quality management and innovation, Polycab serves a diverse customer base through a robust distribution network comprising over 4,300 authorized distributors and 205,000 retailers nationwide.
Polycab Posts Poor Q1 FY25 Results Due to Business Mix - FAQs
1. What was Polycab's revenue in Q1 FY25? .
Polycab's revenue in the first quarter of FY25 was ₹46,980 million, reflecting the total money earned from its operations during this period.
2. How much did Polycab's PAT decline year-on-year (YoY) in Q1 FY25?
Polycab's Profit After Tax (PAT) decreased slightly by 0.4% compared to the same quarter last year, amounting to ₹4,016 million.
3. What was Polycab's EBITDA margin in Q1 FY25?
Polycab's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin was 12.4% in the first quarter of FY25. This margin indicates the company's profitability before accounting for certain expenses.
4. What percentage did Polycab's revenue grow year-on-year (YoY) in Q1 FY25?
Polycab's revenue grew by 21% compared to the first quarter of the previous fiscal year, reaching ₹46,980 million
5. How much did Polycab's revenue decline quarter-on-quarter (QoQ) in Q1 FY25?
Polycab's revenue declined by 16% compared to the previous quarter, amounting to ₹46,980 million in Q1 FY25.
6. What was the year-on-year (YoY) growth in Polycab's FMEG segment revenue in Q1 FY25?
Polycab's Fast Moving Electrical Goods (FMEG) segment showed a strong growth of 21% compared to the same quarter last year, driven by increased demand for products like electric fans during regional heatwaves.
7. How much did Polycab's international business revenue decline year-on-year (YoY) in Q1 FY25?
Polycab's revenue from international business decreased by 28% compared to the first quarter of the previous year, affecting the company's overall revenue.
8. What was the year-on-year (YoY) growth in Polycab's EPC business total income in Q1 FY25?
Polycab's Engineering, Procurement, and Construction (EPC) business reported a significant 292% growth in total income compared to the same quarter last year, mainly due to efficient execution of its order book.
9. What was the percentage of revenue from operations to total revenue in Q1 FY25?
Revenue from operations constituted 100.0% of Polycab's total revenue in the first quarter of FY25, indicating that all their income came directly from their core business activities.
10. What was the cost of goods sold as a percentage of revenue in Q1 FY25?
The cost of goods sold was 75.4% of Polycab's total revenue in the first quarter of FY25, representing the expenses incurred in producing the goods sold during this period.
11. How much did Polycab spend on employee costs as a percentage of revenue in Q1 FY25?
Polycab allocated 3.3% of its total revenue towards employee costs in the first quarter of FY25, covering salaries and benefits for its workforce.
12. What percentage of revenue did Polycab spend on other operating expenses in Q1 FY25?
Polycab used 8.9% of its total revenue for other operating expenses in the first quarter of FY25, which includes various costs like marketing, utilities, and administrative expenses.
13. What was the total operating expenses as a percentage of revenue in Q1 FY25?
Total operating expenses accounted for 12.2% of Polycab's total revenue in the first quarter of FY25, encompassing all expenses related to running its business operations.
14. How much did Polycab report in other income as a percentage of revenue in Q1 FY25?
Other income represented 1.2% of Polycab's total revenue in the first quarter of FY25, which includes non-operating income sources such as investments and other miscellaneous earnings.
15. What percentage of revenue did Polycab incur as depreciation in Q1 FY25?
Polycab's depreciation expenses accounted for 1.4% of its total revenue in the first quarter of FY25, reflecting the allocation for the wear and tear of its assets over time.
16. How much did Polycab spend on finance costs as a percentage of revenue in Q1 FY25?
Polycab allocated 0.9% of its total revenue towards finance costs in the first quarter of FY25, covering expenses related to interest payments and borrowing costs.
17. What was Polycab's PBT as a percentage of revenue in Q1 FY25?
Polycab's Profit Before Tax (PBT) was 11.4% of its total revenue in the first quarter of FY25, indicating the company's earnings before deducting taxes.
18. How much did Polycab pay in income tax as a percentage of revenue in Q1 FY25?
Polycab paid 2.8% of its total revenue as income tax in the first quarter of FY25, reflecting the taxes levied on its taxable income for that period.
19. What was Polycab's PAT margin in Q1 FY25?
Polycab's Profit After Tax (PAT) margin was 8.5% in the first quarter of FY25, representing the percentage of its total revenue that translates into net profit after deducting all expenses.
20. What was the percentage change in Polycab's EBITDA margin quarter-on-quarter (QoQ) in Q1 FY25?
Polycab's EBITDA margin decreased by 1.2% compared to the previous quarter.
21. How much did Polycab's EBITDA decrease quarter-on-quarter (QoQ) in Q1 FY25?
Polycab's EBITDA decreased by ₹1,781 million compared to the previous quarter, indicating a decline in earnings before accounting for certain expenses.
22. What was the year-on-year (YoY) change in Polycab's total income from the EPC business in Q1 FY25?
Polycab's EPC business reported a significant 292% year-on-year (YoY) growth in total income in Q1 FY25, driven by efficient execution of its order book.
23. What was the percentage change in Polycab's international business revenue quarter-on-quarter (QoQ) in Q1 FY25?
Polycab's revenue from international business decreased by 20% compared to the previous quarter in Q1 FY25.
24. How much did Polycab's revenue from wires & cables grow year-on-year (YoY) in Q1 FY25?
Polycab's revenue from wires & cables segment grew by 11% compared to the same quarter last year in Q1 FY25.
25. What was the percentage change in Polycab's revenue from FMEG quarter-on-quarter (QoQ) in Q1 FY25?
Polycab's revenue from the Fast Moving Electrical Goods (FMEG) segment declined by 23% compared to the previous quarter in Q1 FY25.
26. How much did Polycab's employee costs decrease quarter-on-quarter (QoQ) in Q1 FY25?
Polycab's expenditure on employee costs decreased by ₹157 million compared to the previous quarter in Q1 FY25.
27. What was the percentage change in Polycab's other operating expenses quarter-on-quarter (QoQ) in Q1 FY25?
Polycab's other operating expenses decreased by 13% compared to the previous quarter in Q1 FY25.
28. What was the year-on-year (YoY) change in Polycab's PAT in Q1 FY25?
Polycab's Profit After Tax (PAT) increased marginally by 0.4% compared to the same quarter last year in Q1 FY25.
29. How much did Polycab's finance costs increase quarter-on-quarter (QoQ) in Q1 FY25?
Polycab's finance costs increased by ₹169 million compared to the previous quarter in Q1 FY25.
30. What was the percentage change in Polycab's EBITDA margin year-on-year (YoY) in Q1 FY25?
Polycab's EBITDA margin decreased by 1.7% compared to the same quarter last year in Q1 FY25.