Polycab India shares surge 2% on strong Q3 show

Shares of Polycab India surged as much as 2.54% to hit an intraday high of ₹4,543.45  in early trade on Friday after the manufacturer of cables and wires witnessed a 15.3% increase in net profit to ₹416.5 crore in the December quarter of FY24, as against ₹361.69 crore in the same period last year.

The scrip opened higher at ₹4,504.50, up 1.65%, as against the previous closing price of ₹4,431. At 11:37 am, however, the company's share price was trading 1.54% lower at ₹4,364. In contrast, the broader BSE Sensex was trading 543.18 points or 0.76% higher at 71,730.04.

The company’s market capitalisation stood at ₹66,525.61 crore with 40,901 shares exchanging hands on the BSE, as against the two-week average of 3.44 lakh shares. The company hit a 52-week high of ₹5,722.90 on December 14 last year and a 52-week low of ₹2,725 on January 1 last year.

In the last one year, the counter has given 56.36% in returns.

In the October to December period of FY24, the company reported a 16.8% jump in sales to ₹4,340.4 crore as against ₹3,715.1 crore in the same period last year on the back of strong volume growth in the wires and cables business. The company’s wires and cables business revenue grew by 18% in the December quarter.

"The demand environment remained strong, supported by the government's continuous focus on infrastructure development and a pickup in private capital expenditure. Domestically, both distribution and institutional businesses reported robust performances. Revenue from international business contributed 6.2% to the consolidated revenue for the quarter. The company anticipates a healthy performance in international business during Q4 FY24 and beyond," the company says in a statement.

Meanwhile, the company’s operating/EBIT (earnings before interest and tax) improved by 20 basis points at 14% in the December quarter.

The company’s FMCG business, however, witnessed a de-growth of 15% year-on-year, during the quarter under review, primarily due to sustained weakness in consumer demand.

“The Fans segment grew sequentially, but registered YoY de-growth, on account of a higher base of the previous year due to stock liquidation activities prior to the BEE transition. The Lights segment continued to decline, adversely impacted by further pricing erosion. Both Switches & Switchgears segments exhibited robust growth during the quarter. Higher Advertising and Promotion (A&P) spending and the absence of economies of scale resulted in accelerated bottom-line de-growth,” the company says.

Sequentially, the company’s net profit declined by 3.06% as against ₹429.7 crore in the September quarter. The company’s EBITDA (earnings before interest, tax, depreciation and amortization) also declined by 130 basis points quarter-on-quarter to 13.1%, mainly due to higher A&P spending. The company’s revenue, however, grew by 2.9% sequentially, as against ₹4,217.6 crore in the same period last year.