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Polycab India
Our verdict on Polycab India isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Management reiterated that the EHV capacity is on track to come on stream by the end of the 2026 calendar year. (1 in progress across 1 tracked commitment)
“We are expecting that plant to get commissioned by the end of next calendar year. So perhaps we'll be able to start seeing benefit from the EHV sales only in FY 2028.”
Management made a strategic decision to defer the pass-through of elevated input costs to protect demand. (+1 more commitment)
“Strategic decision to defer the pass-through of elevated input cost to protect demand”
Management targets W&C business growth at approximately 1.5x of market growth in core segments by FY30. — target: ~1.5x of Market Growth (+2 more commitments)
“~1.5x of Market Growth in Core segments”
The company expects to accrue specific margins from the BharatNet project order book. — target: 12% to 14%
“As far as the profitability is concerned, we expect to accrue almost 12% to 14% of margins in that order book as well”
Management targets FMEG business growth at 1.5x to 2x of market growth in FMEG by FY30. — target: 1.5x – 2x of Market Growth (+4 more commitments)
“1.5x – 2x of Market Growth in FMEG”
See the full cited Management analysis of Polycab India
How durable is the business?
The Solar category is emerging as a major driver within FMEG, poised to become the largest category in that portfolio this year due to government incentive schemes. (1 expanding)
“Solar category maintained strong momentum... this category is poised to become the largest within the FMEG portfolio for the year”
The segment continues to be the primary engine, growing 31% YoY in revenue and 51% in EBIT, driven by government spending and rising commodity prices. (2 expanding)
“The segment reported robust growth during the quarter, supported by sustained demand across core sectors. Key growth drivers included higher government expenditure, better project execution and rising commodity prices”
The company maintains a very strong net cash position of ₹ 31 billion, supporting its 'Project Spring' capex guidance of ₹ 12-16 billion annually. (1 stable, 1 expanding)
“We continue to maintain a strong balance sheet, closing the quarter with a net cash position of ₹ 31 billion.”
The net cash position strengthened significantly, increasing by 90% YoY, reinforcing the company's financial defensibility. (4 expanding, 1 contracting across 1 engine)
“Revenue for the quarter and FY26 was impacted by the timing of the project execution cycle, resulting in a 15% YoY decrease for the quarter... Revenue (₹ Mn) Q4FY26 5,098”
Strategic pricing revisions and a shift toward premium products helped expand EBITDA margins by 210 bps YoY despite commodity price volatility. (2 expanding, 2 stable, 1 shifted)
“the way we procure our raw materials, there are never any inventory gains. We don't buy on spot, right? So we have a hedging mechanism in place. ... for both copper and aluminium, we hedge.”
See the full cited Business Model analysis of Polycab India
Where does growth come from?
Solar products have maintained a high-growth trajectory, doubling in revenue year-on-year and becoming the largest category within the FMEG portfolio. (3 steady across 3 signals)
“The FMEG business concluded a strong year with a solid Q4 performance, delivering 47% YoY growth for the quarter. Solar products emerged as a standout performer, delivering nearly 2x growth YoY”
Institutional sales are becoming a dominant growth driver, outpacing retail channel sales, though this shift is currently putting pressure on profit margins. (1 accelerating, 1 steady across 2 signals)
“Within the cables segment, institutional sales growth outpaced channel sales growth.”
The FMEG business is showing a clear path to profitability, achieving its second consecutive profitable quarter with EBIT margins expanding to 2.1% from a loss in the previous year. Growth is driven by premiumization and real estate demand. (3 accelerating, 1 decelerating, 1 steady across 5 signals)
“Our solar products business was a standout performer, delivering 2-fold year-on-year growth and emerging as the largest category within the FMEG portfolio.”
The company is expanding its global reach, entering 10 new countries this year to diversify its income sources. (+1 more signal)
“During the year, the company expanded its global footprint by adding 10 new geographies, taking its presence to 94 countries.”
The company uses a price pass-through and hedging strategy to protect its profit margins from volatile raw material costs like copper and aluminum. — EBITDA Margin: +13% YoY (Quarterly EBITDA)
“we have a hedging mechanism in place. So we don't have any inventory gain unlike peers... we are always at a position where we are able to manage within a band”
See the full cited Future Growth analysis of Polycab India
What could break the thesis?
The risk has significantly eased as the Wires and Cables business delivered over 25% volume growth during the quarter, driven by robust domestic demand. (3 easing)
“So where power sector alone consumes around 40% to 45% of cables. Manufacturing and private industries consume around 35% to 40% of cables.”
Acceptances have continued to rise significantly, reaching ₹ 25,668 Mn in June 2025 compared to ₹ 13,062 Mn in March 2025 and ₹ 16,528 Mn in June 2024. (3 intensifying, 2 easing)
“Acceptances: Mar-26 42,656; Mar-25 13,062”
The company is significantly increasing its capital expenditure (spending on factories and equipment), which carries the risk of cost overruns or underutilization if demand does not grow as expected. [BALANCE_SHEET]
“Capex: ₹ 9.6 Bn (FY25) to ₹ 14.8 Bn (FY26), 54% increase. Cash flows reinvested in business to capture strong demand opportunity”
The FMEG (Fast Moving Electrical Goods) segment, while growing, has historically struggled with profitability and is currently operating at much lower margins than the core cable business. [MARGIN_COST]
“Segment profitability continued to improve... in line with Project Spring guidance of achieving EBITDA margins of 8–10% by FY30”
Changes in energy efficiency standards (BEE norms) for fans caused temporary inventory adjustments in the sales channel, affecting short-term growth. [REGULATORY]
“Despite the delayed summer onset in certain regions and temporary channel inventory adjustments following changes in BEE norms, the segment delivered growth.”
See the full cited Risk analysis of Polycab India
Polycab India analysis by filing period
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