Synopsis: Shares fell after promoter’s 0.81% stake sale, creating short-term pressure. Strong Q1 revenue and profit growth was led by wires & cables and FMEG segments, while EPC lags. Strategic capex, premiumization, and operational efficiency underpin long-term expansion and margin improvement.
The shares of the prominent cable manufacturer plummeted 1.3 percent in today’s trading session after the company’s promoter is expected to offload 0.81 percent of the company via a block deal.
With a market capitalization of Rs 1,12,922.29 crore, the shares of Polycab India Ltd were trading at Rs 7,506.60 per share, decreasing around 0.35 percent as compared to the previous closing price of Rs 7,533.20 apiece.
Block Deal
The shares of Polycab India Ltd have seen bearish movement after its promoter plans to sell a 0.81 percent stake through a block deal worth around Rs 887.6 crore. The floor price of Rs 7,300 per share, set at a 3 percent discount to market levels, signaled profit booking pressure. While the deal may create short-term volatility.
Financial & Segment Highlights
The company delivered a strong Q1FY26 performance with revenue rising 26 percent to Rs 5,906 crore and net profit surging 49 percent to Rs 600 crore. Robust growth reflects healthy demand and improved margins, highlighting operational efficiency and positioning the business well for sustained earnings momentum.
The wires and cables segment posted 31% YoY growth, driven by over 25% volume gains, strong domestic demand, and government spending. Cables outpaced wires, with both distribution and institutional channels performing well. Exports rose 24%, aided by tariff advantages in the US, compared to competitors. EBIT margin expanded to 14.7% on operating leverage. Rising organised market share and robust capacity reinforce leadership, while evolving tariffs remain a watch factor.
Also read: Pharma stock in focus after board approves evaluation of agro business demerger
The FMEG segment grew 18% YoY, driven by premiumization and scaling efficiencies, marking its second consecutive profitable quarter. Premium fans, lighting, and switches contributed to margin gains, while solar inverters doubled YoY, fueled by rooftop schemes. Management targets FMEG growth 1.5–2x the industry with 8–10% EBITDA margins by FY30, signaling strong long-term potential despite current modest market share.
The EPC segment saw revenue decline 19% YoY to Rs 3,474 million, with a 7.7% margin. The order book includes significant BharatNet projects and RDSS contracts, supporting future execution. Margins are projected at 12–14% for BharatNet and high single digits for RDSS. Despite contributing 5–10% to consolidated revenue, favorable upfront payments improve working capital efficiency.
Project Spring outlines a multi-year strategy emphasizing Rs 6,000–8,000 crore capex for capacity expansion, margin improvement, and FMEG growth. Focus is on W&C and backward integration, with premiumization in B2C wires and FMEG. Etira, Maxima, and Suprema brands drive higher-value sales. Exports leverage India’s cost advantage, while global manufacturing remains a long-term consideration.
Written by Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
