Wires and cables major on Tuesday reported its best-ever first-quarter revenue and profit even as seasonal pressures resulted in a sharp decline compared to the preceding quarter.
The company’s consolidated topline grew 48% year-on-year but declined 31% quarter-on-quarter to Rs 2,737 crore. Profits tripled on year to Rs 223 crore but were down 32% compared to the previous quarter.
Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 132% year-on-year to Rs 311 crore. EBITDA was 35% lower than the preceding quarter. EBITDA margin came in at 11.4%.
“Despite some headwinds, this was the best first quarter performance in the history of the company,” Gandharv Tongia, the chief financial officer at Polycab India told ET.
The company has lined up capital expenditure of Rs 300-400 crore for this fiscal year of which about Rs 100 crore were invested during the April-June quarter, Tongia said. The investment will be on setting up new capacities, debottlenecking existing capacities and transitioning the sourcing of some products like switches from vendors to in-house production.
While the prices of copper and aluminium have softened significantly over the past month, Tongia said that there will be no impact on the company’s profitability as it makes price revisions at least once a month. However, softer commodity prices will result in a lower list price of its products, which in turn will impact its top line.
There will also be some inventory rationalisation by dealers when prices correct so sharply, but that would be a short-term impact, he said.
The company’s bread-and-butter cables and wires business grew by 48% year-on-year and accounted for 87% of the total revenue. Meanwhile, its relatively new fast-moving electrical goods business grew by 59%, accounting for 11% of the consolidated top line.
The stock of
grew by 4.26% to close at Rs 2,245 on Tuesday. Benchmark Sensex closed 0.45% higher.
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