Polycab India Q3 Results: Potential Impact on Sales Post December IT Raids, Analysts Expect Profit Rise of Up to 25%

Polycab India Q3: BNP Paribas Forecasts 25% Surge in Adjusted Profit to Rs 447.20 Crore; Anticipates 22% Sales Growth to Rs 4,539.20 Crore

Polycab India Q3 Earnings Outlook: Anand Rathi Forecasts 16.1% YoY Rise in Net Profit at Rs 415.30 Crore; Predicts 18.7% Sales Growth at Rs 4,409 Crore with Ebitda Margin of 14.1%

Polycab India Ltd is set to announce its Q3 results, with analysts expecting a robust up to 25% YoY surge in profit and a 12-20% rise in revenue. The company, known for cables and wires, faced a share decline due to recent income tax raids.

Analysts foresee a potential impact of the IT raids on sales, anticipating a sequential drop in margins but a YoY increase.

The results will shed light on the company’s performance amidst recent challenges.

Anand Rathi, a domestic brokerage, anticipates Polycab India to disclose a 16.1% YoY increase in net profit, reaching Rs 415.30 crore for the quarter. The brokerage expects a corresponding 18.7% rise in sales, amounting to Rs 4,409 crore.

The projected Ebitda margin for the quarter is estimated at 14.1%, compared to 14.4% in September and 13.6% in the year-ago quarter. The results will provide insights into the company’s financial performance during the specified period.

According to BNP Paribas, adjusted profit for Polycab India is expected to reach Rs 447.20 crore, reflecting a 25% YoY increase. The forecast includes a projected 22% growth in sales, reaching Rs 4,539.20 crore.

The anticipated margin is 14.4%, up 80 basis points YoY, attributed to the company’s commodity hedging policy and a rising contribution from exports. However, the margins in the Fast-Moving Electrical Goods (FMEG) segment may face pressure.

BNP Paribas has expressed interest in understanding the impact of commodity price volatility on channel inventory, demand expectations leading into the election season, and the potential for profitability revival in the Fast-Moving Electrical Goods (FMEG) business for Polycab India.

Nirmal Bang expects Polycab India’s profit to surge by 22.6% YoY to Rs 438.50 crore, with sales projected to increase by 20% YoY to Rs 4,458 crore. Meanwhile, Phillip Capital forecasts an 18.1% rise in profit and a 17.9% increase in revenue YoY. Phillip Capital highlights strong growth in the Wire and Cable (W&C) segment, particularly in B2B, exports, and the south and east markets

The statement suggests an anticipated growth of 17% in the Wire and Cable (W&C) segment for Q3. However, the last 10 days of the quarter sales are expected to be impacted mainly due to income tax raids. The Fast-Moving Electrical Goods (FMEG) segment is reportedly impacted, particularly in the fans category.

Axis Securities anticipates robust growth in the Business-to-Business (B2B) segment and exports to positively impact Polycab India’s performance. The brokerage firm projects a 15.2% YoY increase in profit, reaching Rs 416 crore. Revenue is expected to surge by 16.5% YoY to Rs 4,330 crore. Additionally, Axis Securities forecasts a 19.5% rise in Ebitda to Rs 602 crore, with an estimated Ebitda margin of 13.9%.

Despite recent challenges and a 21.80% decline in Polycab India’s shares over the last month, the stock rose 2.32% to Rs 4,440.05 on Wednesday. Jefferies maintained its target of Rs 7,000 on the stock.

Prabhudas Lilladher expects Polycab India’s overall revenue to grow by 12% YoY, with Wires & Cables sales experiencing an 11.1% increase. However, the growth in this segment is anticipated to be lower due to the last 10 days of disruption in business and a slowdown in the wire business.

For the Fast-Moving Electrical Goods (FMEG) segment, Prabhudas Lilladher predicts a 4% YoY growth, impacted by a seasonally weak quarter for the fan segment. Margins are expected to contract by 20 basis points YoY due to the loss of sales, and Profit After Tax (PAT) is estimated to grow by 4.7% YoY. These forecasts provide a comprehensive outlook on Polycab India’s expected financial performance.

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