Polycab India Limited Q3 FY26 Earnings Call Summary

Summary

Polycab India Limited - Q3 FY26 Earnings Call Summary Friday, January 16, 2026 4:00 PM IST

Event Participants

Executives 3 Chirayu Upadhyaya (Head of Investor Relations), Niyant Maru (Chief Financial Officer), Shashank Yagnick (Head Strategy)

Analysts 7 Achal Lohade, Akshay Gattani, Aniruddha Joshi, Ashish Jain, Keyur Pandya, Pulkit Patni, Ravi Swaminathan, Sonali Salgaonkar, Umang Mehta, Vidit Trivedi

Financials & KPIs

Geographic & Segment Commentary

• Wires & Cables (W&C): Domestic segment delivered exceptional 59% revenue growth and ~40% volume growth. Growth was supported by robust government capex (+28.2% in 8M FY26) and healthy real estate sales. Wires outperformed cables due to channel stocking amid rising copper prices.
• FMEG: Maintained momentum with 17% growth, led by the Solar business which grew 2x YoY due to government rooftop incentive schemes. The segment remained profitable as scale offset increased A&P investments. Fans were flattish due to soft summer inventory liquidation and BEE transition.
• International Business: Grew 5% YoY, contributing 6% to consolidated revenue. Performance was strong in the Middle East and Latin America, though the US market remained soft due to ongoing tariff uncertainties.
• EPC: Stable performance with 6.7% margins. Execution of BharatNet orders (₹8.0 billion total value over 10 years) has commenced, which is expected to provide steady revenue over the mid-term.

Company-Specific & Strategic Commentary

• Leadership Transition: Board approved redesignation of Bharat Jaisinghani and Nikhil Jaisinghani as Joint Managing Directors to lead long-term value creation.
• Project Spring Execution: Execution focus drove 30% revenue growth for 9M FY26, crossing the ₹200 billion milestone. Strategic focus remains on white-space expansion in Tier 3-5 cities.
• Pricing Strategy: Management opted for a “staggered” pass-through of commodity inflation (copper +21%, aluminum +11% QoQ) to protect volumes and gain market share, leading to temporary gross margin pressure.
• Brand Investment: Increased A&P spending (currently ~1.5% of B2C revenue) with a long-term target of 3% to 5% to strengthen the FMEG and retail wires presence.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Margin Compression Drivers

• Question: What led to the sequential drop in EBITDA margins despite high volume growth? (Sonali Salgaonkar)
• Answer: Primarily the sharp 21% QoQ rise in copper prices which was passed on in a staggered manner (75-80% recovery). Margin was also hit by higher A&P, unfavorable mix (higher institutional vs. channel), and lower export contribution (Chirayu Upadhyaya).

Volume Growth & Market Share

• Question: How did volumes grow 40% when the industry is estimated at 20%? (Aniruddha Joshi)
• Answer: Polycab is outperforming via “Project Spring” by entering geographic whitespaces and gaining wallet share from distributors. Market share gains are evident as W&C grew 59% domestically (Niyant Maru).

Inventory & Hedging

• Question: Did higher inventory result in gains during the price rally? (Achal Lohade)
• Answer: No, Polycab hedges its inventory. Pricing is fixed at the time of order/sale, not procurement, to ensure margin stability and avoid speculative gains/losses (Chirayu Upadhyaya).

FMEG & Solar Performance

• Question: What is the outlook for the solar business and FMEG profitability? (Aniruddha Joshi)
• Answer: Solar is now the largest FMEG category and high-single-digit margin accretive. FMEG profitability is sustainable due to better mix in switches, conduits, and solar (Chirayu Upadhyaya).

Key Takeaway

Polycab India delivered a robust Q3 FY26 with 46% revenue growth, crossing the ₹200 billion milestone for the 9-month period. Domestic Wires and Cables volumes grew 40% YoY, significantly outpacing the industry and indicating substantial market share gains. While EBITDA margins compressed to 12.7% due to a strategic decision to stagger price hikes amid a 21% QoQ surge in copper prices, the company prioritized volume protection and channel loyalty. The FMEG segment showed structural improvement, remaining profitable for the fourth consecutive quarter led by a doubling of the Solar business. Management remains optimistic about Q4 FY26, citing strong demand in real estate and government capex, and expects margins to normalize as recent price hikes take full effect. Key watch-points include continued commodity price volatility and the resolution of US tariff uncertainties affecting international growth.