Polycab India Limited is India’s leading electrical brand, specializing in wires, cables, and Fast Moving Electrical Goods (FMEG). Headquartered in Mumbai, it has achieved industry leadership with revenue surpassing ₹220 billion in FY25. With robust domestic and global presence, cutting-edge innovation, and strong execution under its “Project Spring” initiative, Polycab continues driving sustainable growth and market expansion.
In this article we are going to discuss the summary of the management commentary that was delivered on Q4FY25 performance.
Inder T. Jaisinghani – Chairman & Managing Director
- FY25 was a landmark year for Polycab, with record-breaking revenues in both Q4 and the full year.
- The company crossed ₹220 billion in annual revenue, becoming the largest company in India’s electrical industry by revenue.
- Wires and Cables continued their market leadership.
- FMEG business surpassed industry growth and achieved profitability.
- The EPC segment scaled up significantly with strong project execution.
- PAT (Profit After Tax) crossed ₹20 billion, marking Polycab as the most profitable player in the industry for the third straight year.
- Confidence is high for sustained growth due to strong industry tailwinds, demand momentum, and the strategic transformation under Project Spring.
Gandharv Tongia – Executive Director & CFO
Macro & Business Environment
- Acknowledged global trade tensions and downward revisions in IMF global GDP forecasts.
- Advanced economies like the US (1.8%) and EU (0.8%) are expected to slow.
- India stands out as relatively insulated from global disruptions.
- Positive domestic indicators include:
- Interest rate cuts by RBI.
- Digital payment surge, industrial and auto sector recovery.
- Strong PMI in manufacturing and services.
- Real estate sector hitting a decade high.
- Polycab is leveraging this favorable macroeconomic backdrop to deepen its market reach and scale operations.
Chirayu Upadhyaya – Head of Investor Relations
Financial Highlights
- Q4FY25:
- Revenue up 25% YoY.
- EBITDA up 35% YoY with margin expansion of 110 bps to 14.7%.
- PAT at ₹7.3 billion, up 33% YoY; PAT margin at 10.5%.
- FY25:
- Revenue crossed ₹220 billion, up 24% YoY.
- EBITDA grew 19% with 13.2% margin.
- PAT grew 13% to over ₹20 billion.
Operational Highlights
- Wires & Cables:
- 22% YoY revenue growth in Q4.
- Domestic business grew 27% YoY.
- Organized market share increased to 26–27% (from 25–26% in FY24).
- EBIT margin improved to 15.1%.
- FMEG:
- 33% YoY growth in Q4; fifth consecutive quarter of outperformance.
- Premiumization strategy paid off: premium fans and lighting now contribute ~30% by value.
- Solar products grew 2.5x YoY, becoming the third-largest category in FMEG.
- Segment turned profitable in Q4 after 10 quarters of investments.
- Targeting 8–10% EBITDA margin by FY30 under Project Spring.
- EPC:
- Revenue at ₹6,028 million in Q4, up 47% YoY.
- Profitability up 171% YoY with 9.4% segmental margin.
- Major wins include BharatNet (₹30 billion) and RDSS projects.
- Open order book stands at ₹70 billion.
Strategic Updates
Project Spring Capex Plan: Targeting ₹60–₹80 billion over 5 years; FY25 Capex was ₹9.6 billion.
Export Growth:
- Contribution to revenue currently at 6%, aiming for 10% by FY30.
- US contribution fell to high teens from ~40% due to business model transition, which is now complete.
- Strong orders expected from Middle East, Europe, and Australia.
Working Capital & Cash Position:
- Working capital cycle improved to 49 days.
- Net cash position stands at ₹24.6 billion.
- Dividend proposed: ₹35 per share; payout ratio at 26.3%.
Question and Answer Session Highlights
Q: What was the volume vs value growth in domestic cable and wire business for Q4 FY25?
A (Chirayu Upadhyaya): Volume growth was in mid-teens, value growth accounted for the rest. Cables grew faster than wires; cables had high-teen volume growth, wires were in high single digits.
Q: Can you share volume growth trends for FY25 and FY24 for cables and wires?
A: For FY25, volume growth was in mid-teens; cables grew more than wires. FY24 data is available in last year’s call.
Q: Any one-offs in margin improvement in Q4 despite weak exports?
A: No one-offs. Margin improvement was due to strong operating leverage and seasonal strength in Q4.
Q: What’s the margin guidance for cables and wires over next 3–4 years?
A: EBITDA margin guidance is 11%–13%. FY25 EBITDA margins were ~14%–15%; EBIT margin was 13.6%.
Q: Is the 100-bps margin expansion in Q4 driven by regional factors or mix?
A: Broad-based. Driven by better product mix (wires outperformed sequentially) and operating leverage.
Q: What’s driving market share gains?
A: GTM initiatives and strong execution. Over time, portfolio and distribution strategy will contribute more.
Q: On the solar business – what is your GTM and do you plan backward integration or EPC in solar?
A: We sell solar inverters via outsourcing. No plans for in-house manufacturing or entering solar EPC.
Q: What’s the export growth outlook in FY26 amidst US trade tensions?
A: Expect improvement. Shift to hybrid model in the US is complete. Orders from Middle East, Europe, and Australia are healthy. Tariffs haven’t had a negative impact; India may benefit relative to others.
Q: Can EBITDA margins improve as exports grow?
A: Possibly, but investments in capex, advertising, and R&D may offset margin expansion. 11%–13% EBITDA margin guidance remains.
Q: What type of cables are exported? Specialized or standard ones?
A: Mostly low and medium voltage cables, but also some specialized cables depending on geography and project.
Q: What’s driving domestic cable demand?
A: LV/MV cables dominate. Demand is broad-based – power, renewables, real estate are all contributing.
Q: Where will increased R&D spend go, and any % of sales guidance?
A: Focus on innovation and new product development. No fixed percentage guidance, but absolute spend will rise steadily.
Q: Of the ₹70 billion EPC order book, how much is RDSS vs BharatNet?
A: ₹40 billion from RDSS, ₹30 billion from BharatNet (includes ₹15 billion capex and ₹15 billion opex).
Q: Advertisement spend declined in Q4 – why?
A: Delayed summer impacted fan ads. Last year had one-time ICC sponsorships. This year focus is more on digital and ground-level campaigns.
Q: Is the export dip linked to US tariff issues?
A: No. Dip was due to order rollover. Current tariffs are manageable and India is relatively better placed than peers.
Q: What was the US share of exports in FY25 and FY24?
A: FY25: high teens; FY24: ~40%.
Q: With the US transition complete, can we expect a sharp rebound?
A: Improvement expected, but full momentum depends on tariff clarity in coming months.
Q: What drove margin improvement in cables/wires sequentially?
A: Higher share of wires (better margins than cables) in Q4 helped. Some support from product mix but not significant.
Q: Will FMEG demand be impacted by delayed summer?
A: Fans may be affected, but other categories (solar, switches, lighting) are doing well, so overall impact will be limited.
Q: Is the 11%–13% margin guidance at EBITDA level?
A: Yes.
Q: Why guide lower than current margins (~14%–15%)?
A: Guidance is conservative and sustainable. Actual margins may exceed, but long-term view remains 11%–13%.
Q: How important are power generation and transmission to your business?
A: Power gen and distribution are significant; presence in transmission is limited now but expected to grow.
Q: Has demand from thermal power projects started or is it yet to come?
A: Some benefits already visible, but major impact expected over next few years due to aggressive renewable targets.
Q: What was capacity utilization in FY25? Any new players entering?
A: Annual utilization was 70%–80%; Q4 >80%. Entry of new players validates the market opportunity and will benefit organized sector by accelerating shift from unorganized players.
Q: Any new product launches in FMEG?
A: No new products planned in the near term.
Q: What portion of FY25 business came from RDSS projects (both cable and EPC)?
A: Almost all EPC revenue came from RDSS. 40% of EPC order value is cable supply.
Q: Is RDSS opportunity sustainable beyond FY26?
A: RDSS runs till FY26. Any extension would open new opportunities; watching policy updates.
Q: Why does Polycab have much better margins vs peers (5–6% higher)?
A: Mix of higher pricing (2%–5% premium), better exports margins, and favorable mix of LDC vs HDC cables. Also superior execution and scale efficiencies.