Polycab India Ltd. delivered exceptional first quarter results that exceeded market expectations across key parameters. The wires and cables manufacturer reported revenue growth of 39% year-on-year to ₹8,210 crore, significantly surpassing the CNBC-TV18 poll estimate of ₹7,902 crore. This represents a substantial increase from ₹5,906 crore reported in the same quarter last year. The company's consolidated net profit rose 33% year-on-year to ₹797 crore, compared to ₹592 crore in the year-ago quarter. Total income increased 38.9% to ₹8,314.65 crore, while sequentially, net profit increased 1.4% from ₹785.60 crore in the March quarter. The company's profit before tax rose 32.2% to ₹1,058.22 crore from ₹800.59 crore, though profit-before-tax margin narrowed by 67 basis points to 12.9% from 13.6%. EBITDA stood at ₹1,136 crore in Q1 FY27, marking a 32.5% surge from ₹858 crore in the June quarter of FY26, though EBITDA margin contracted 0.68% to 13.84% versus 14.52% a year back. Despite strong operational earnings, EBITDA margin declined to 13.8% from 14.5%, indicating lower profitability relative to sales. As per JM Financial Institutional Securities, the growth was largely driven by higher copper and aluminium prices rather than underlying demand, with sharp declines in copper and aluminium prices in June leading dealers to postpone purchases.
The company's core wires and cables business demonstrated robust performance with revenue growing 39.4% year-on-year to ₹7,160 crore from ₹5,228.65 crore, surpassing the Motilal Oswal estimate of 35%. The segment's segment result increased 25% to ₹950 crore from the previous year, reflecting strong operational efficiency. Domestic wires and cables revenue surged 43% year-on-year, led by strong execution under Project Spring, with the wires business outpacing cables. Export revenues fell 13% due to geopolitical disruptions in West Asia, while wires and cables contributed about 88% of total Q1FY27 revenues. Volume growth remained in the low-to-mid single digits on a high base, with pricing supported by higher commodity realizations. Channel sales grew faster than institutional sales, supported by healthy market demand and execution under Project Spring. However, sequentially, wires and cables revenue declined 7.2% and the segment result fell 5.8% from the March quarter. The EBIT margin for the W&C segment improved sequentially to 13.3%, driven by a favourable business mix and continued operational efficiencies, while the company maintained its EBIT margin guidance of 11-13%. As per JM Financial Institutional Securities, the management's strategy is focused on channel-led growth rather than institutional growth, with channel sales typically generating superior margins and helping leverage the distribution network across multiple product categories.
The Fast-moving electrical goods (FMEG) segment delivered exceptional performance with revenue increasing 71% year-on-year to ₹760 crore, demonstrating remarkable operational leverage. The segment's segment result rose to ₹60.6 crore from ₹9.6 crore in the previous year, with growth across all product categories. Solar products remained the largest category in the portfolio, growing more than two-fold from a year ago, supporting the company's diversified product portfolio beyond traditional wires and cables. The FMEG segment EBIT margin improved to 8.0% (+580 basis points), aided by operating leverage and a richer product mix, in line with the company's Project Spring target of achieving 8-10% EBITDA margins by FY30. Premium products now account for roughly a quarter of the FMEG portfolio, with better operating leverage and a growing premium product mix expected to aid the segment's profitability. This growth trajectory indicates successful expansion in the company's diversified product portfolio, with the segment showing continued strength in profitability metrics. The much smaller FMEG business, contributing 9% of Q1 revenues, continued its good run with growth expected at 1.5-2x industry growth, while the segment's growth is expected to be on track to meet its target of 8-10% EBITDA margins by FY30.
The international business revenue declined 12.7% year-on-year, primarily due to geopolitical disruptions affecting global operations. The EPC business reported an 11.4% decline in revenue to ₹310 crore due to the timing of project execution, while maintaining an 11.0% EBIT margin and EBIT increasing 26.4% to ₹33.8 crore. The company said the segment continues to be supported by a healthy order backlog and strong execution pipeline, indicating resilience in the infrastructure segment despite temporary headwinds. Export revenue contribution in total is down to 3.3% in Q1FY27, from 5.2% last year, with the company expecting exports share in total revenue to rise to more than 10% by FY30. The EPC order book stands at about ₹10,900 crore, comprising of ₹8,000 crore from BharatNet and ₹2,900 crore RDSS (revamped distribution sector scheme) projects. The company expects meaningful execution over FY27 onwards, with nearly ₹4,500 crore of BharatNet-related revenue likely to be recognized over the next three years.
Polycab shares declined 3.96% to ₹8,850 in afternoon trade on Friday, extending losses for the third straight session and making the stock the top loser on the NSE Midcap 50. The stock has now fallen 7.2% over three sessions, including Friday, after declining 1.2% on Thursday. Despite the recent correction, Polycab shares remain up 15.5% so far in 2026, compared with a 7.1% decline in the Nifty 50, and the company commands a market capitalisation of more than ₹1.33 lakh crore. Brokerages Jefferies and HSBC maintained their bullish ratings on the stock despite the recent decline. Jefferies maintained its 'Buy' rating with a target price of ₹11,100 per share, implying an upside of about 20% from Thursday's close, highlighting the company's strong performance despite the West Asia conflict. Jefferies raised its FY27 and FY28 earnings per share estimates by 2-3% and expects Polycab to deliver a 22% EPS compound annual growth rate over FY26-29. HSBC also maintained a 'Buy' rating with a target price of ₹10,160 per share, expecting demand, capacity expansion and the scaling up of the FMEG business to support an EPS CAGR of around 21% over FY26-29. The brokerages view the company as a play on India's power and capital expenditure cycle, with Polycab trading at 42 times FY27 and 35 times FY28 estimated earnings, compared with its five-year average multiple of 37 times.
