Polycab Q1 revenues rise 39%, shares fall 4% amid concerns

Polycab India Ltd reported a 39% year-on-year increase in consolidated revenues for the June quarter (Q1FY27), reaching ₹8,210 crore. Despite this earnings beat, the company's shares fell approximately 4% in early trading on Friday, marking a third consecutive session of losses. The decline is attributed to concerns over low volume growth in its wires and cables segment, which only saw growth in the low-to-mid single digits, according to the company's management during the earnings call.

Revenue Breakdown

The growth in revenues was primarily driven by higher copper and aluminium prices rather than a significant increase in underlying demand. Polycab's consolidated EBITDA margin decreased to 13.8% in Q1FY27 from 14.5% a year earlier. Wires and cables revenues, which account for about 88% of total revenues, grew by 39% year-on-year, supported by strong domestic demand and improved execution under Project Spring. Domestic revenues rose by 43%, while export revenues fell by 13% due to geopolitical disruptions in West Asia.

Future Outlook

Polycab's management expressed confidence in achieving its growth targets, citing industry tailwinds from investments in transmission and distribution (T&D) infrastructure and data centers. JM Financial Institutional Securities noted that the company aims to achieve wires and cables growth of 1.5 times the industry growth rate. Additionally, the fast-moving electrical goods (FMEG) segment, which contributed 9% of Q1 revenues, experienced a significant 68% year-on-year growth, driven by strong sales in solar products. Brokerages such as Jefferies and HSBC have maintained their 'Buy' ratings on the stock, emphasizing a positive long-term outlook despite the recent share price decline.