PL First Cut – Polycab 1QFY24 - Strong performance in Cable & Wires business

PL First Cut – Polycab 1QFY24 – *Praveen Sahay – Research Analyst, Prabhudas Lilladher Pvt Ltd*

Polycab 1QFY24 Result First cut: Strong performance in Cable & Wires business.

(CMP: Rs4,006| Mcap: Rs600bn | HOLD)

➡️ Revenues grew by 42.1% YoY to Rs38.9bn (PLe: Rs31.3bn, 24.3% above) vs 23.9% above cons. estimates.

➡️ Gross margins expanded by 150bps YoY to 26.5%. (cons. estimates 28.8%)

➡️ EBITDA grew by 76.3% YoY to Rs5.5bn (PLe: Rs4.0bn, 37% above) vs 37.2% above cons. estimates. EBITDA margins expanded by 270bps YoY to 14.1% (PLe: 12.8% & Cons. est. 12.7%) through judicious price revisions and favourable business mix

➡️ PBT grew by 79.2% YoY to Rs5.3bn (PLe:Rs3.7bn)

➡️ PAT grew by 81.7% YoY to Rs3.99bn (PLe:Rs2.7bn) vs 48.1% above cons. estimates.

➡️ Wires & Cables revenues grew by 46.9% YoY to Rs35.3bn (PLe: Rs27.5bn) on strong volume growth in both domestic and international business. International business which grew by 88% YoY contributed 8.9% to its total sales. The company expanded its global footprint to 72 countries. EBIT grew by 88.4% YoY to Rs5.2bn and margins expanded by 330bps YoY to 14.8%.

➡️ FMEG revenues up by 2.1% YoY to Rs3.1bn (PLe: Rs 3.0bn).

➡️ Others revenues grew by 53% YoY to Rs1.5bn. EBIT grew by 46.9% YoY to Rs183mn and EBIT margin contracted by 50bps YoY to 12%.

The stock currently trades at 42x/36x FY24/FY25 earnings.