Since its foray into the FMEG segment in 2014, Polycab focused on products based on upcoming trends. Other businesses including switchgear, solar, and water heaters grew 2X on last year’s low base. Seasonality factor has affected the performance of fans business while lights, switches, conduit pipes and pumps posted healthy growth. The FMEG business segment revenue grew by 40.6% YoY to Rs 342.9 crore in Q2FY22. The revenues from this segment have consistently increased over the last five years and crossed Rs 1,000 crore in FY21.
The contribution of the FMEG segment which was 5.5% about five years ago, has now doubled to 11.5%. Polycab supplies cables across industries like power, oil and gas, construction, railways, telecom and real estate, and most of these sectors are seeing recovery post the second wave of the pandemic. The growing demand across sectors like energy, real estate and demand for reliable, efficient energy as well as data communication is driving this industry. Wires and cables continue to contribute to the majority of the revenues. This has been a growing concern across the industry, largely affecting unorganized players who were unable to absorb the input costs resulting in increasing market share of large organised players like Polycab. Input cost pressures hemmed in the growth in profits as prices of the majority of Polycab’s raw materials prices saw inflation. The results reflect the growing demand of the company’s products across segments and geographies. Polycab is the market leader in the wire and cable space with a market share of 22% in the organised market.
This assumes significance with the background of the previous quarter which was severely impacted by the second wave of the pandemic. Polycab reported its highest ever quarterly revenues in Q2FY22 at Rs 3,016 crore. Resurgence in demand in Q2FY22 after a tepid quarter The company signed an agreement for hiving off its underutilised subsidiary Ryker Base with Hindalco Industries in November 2021 Polycab acquired 100% stake in Bengaluru-based automation company, Silvan Innovation Labs for Rs 18.2 crore in June 2021 381.8 crore in H1FY21 with growth across product categories 2,534.3 crore in H1FY21 due to improved demandįMEG business grew 40% YoY to Rs 534.8 crore in H1FY22 from Rs. Wires and cables business grew 63% YoY to Rs 4,134 crore in H1FY22 from Rs. Highest ever quarterly revenues of Rs 3,016 crore in Q2FY22 The wires and cables industry is a beneficiary of the recent development of power generation, distribution infrastructure, urbanisation, and smart cities, and comprises nearly 40 percent of the electrical industry in India. The Q2FY22 results saw a resurgence in demand post a subdued quarter impacted by the second wave of the pandemic.
Since its listing on stock exchanges in April 2019, the stock has delivered 4X returns for investors, and comparing data for the past one year, it has delivered returns higher than its peers in the electrical wire and cables industry. The company also entered the fast-moving electrical goods (FMEG) space in 2014 and is growing through new product launches and dealer additions across the country. Polycab India is the largest manufacturer of wires & cables in India.
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