Polycab India Limited (POLYCAB) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the PolyCab India Ltd. Q2 FY27 earnings conference call. As a reminder, all participant lines will be in the lesson-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note this conference is being recorded. I now hand the conference over to Mr. Niyanth Maru, Chief Financial Officer, Polycare Media Ltd. Thank you and over to you, sir.

Thank you. A very good evening to everyone and thank you for joining us. I hope all of you are staying healthy and gearing up for the upcoming festive season. On this call, we shall discuss the Q2 FY27 results, which were approved in the board meeting held earlier today. We will be referring to the earnings presentation, financial results, and financial statements, which are available on the stock exchanges, as well as on the Investors Relations page of our website. Joining me today from the management team, we have our Joint Managing Director, Mr. Nikhil Jai Sanghani, and Head of Investor Relations, Aditya Nathani. Let me now hand over the call to Nikhil for his comments. Over to you, Nikhil.

Thank you. Good evening, everyone. As we conclude the first half of FY27, I am pleased to share that PolyCab has delivered its highest ever quarterly and half-yearly revenue and profitability. This performance underscores the resilience of our operating model and the strength of disciplined execution across the organization. The wires and cables business continues to deliver robust growth supported by healthy demand trends, strong market positioning, and consistent execution. The FMEG segment continued to strengthen its growth trajectory and recorded its seventh consecutive profitable quarter. Across the organization, we remain focused on execution excellence, translating strategic priorities into tangible outcomes while building a stronger foundation for sustainable long-term growth. Encouragingly, the initiatives under our strategic Project Spring are progressing in line with plan and are already beginning to yield meaningful results, reinforcing our confidence in both the strategy and our ability to execute it effectively. As we look ahead, our priorities remain firmly anchored on sustaining growth momentum, further enhancing our competitive advantages, and investing in innovation, talent, With a strong foundation in place and clear strategic direction, we are well positioned to capitalize on emerging opportunities and create enduring value for all our stakeholders. With that, I would now like to hand over to Nia.

Thank you, Nikhil. While the global macro environment remains volatile during the quarter, we continue We continue to believe that India remains one of the most compelling structural growth stories globally. Geopolitical tensions, elevated energy prices, higher global corn yields, and disruptions across certain international shipping routes have created near-term uncertainty across markets. However, India continues to navigate and grow, supported by strong domestic demand, healthy investment activity, accelerating infrastructure creation, and increasing manufacturing competitiveness. The IMF in its latest outlook has raised India's growth outlook by 60 basis points despite higher global energy prices, citing stronger economic momentum, robust services activity, and sustained domestic demand. This confidence is reflected in the recent upward revisions to India's growth outlook by several other global agencies. Domestically, GDP growth for Q1F527 came in at 7.8%, underscoring the resilience of the economy despite an increasingly uncertain external backdrop. Global monetary conditions remain tight as central banks continue to combat inflation, resulting in higher policy rates and bond yields across major economies. In India, the Monetary Policy Committee, MPC, unanimously raised the record rate by 25 basis points to 5.5% and shifted the policy stance from neutral to calibrated tightening, implying interest rate cuts are not anticipated in the near term. While the external environment remains challenging, India's strong domestic demand, robust banking system, and sustained infrastructure investment continue to underpin the economic resilience. What gives us confidence is the breadth of growth visible across the economy. GST collections continue to remain healthy, growing by 15% year on year. In July-August, government capital expenditure remains significantly at higher levels, and bank credit growth continues to trend close to 15-20%. Power demand has remained robust, reflecting healthy activity across industrial, infrastructure, and commercial sectors. The focus on infrastructure development continues, which is reflected in the government capex spend of 5.10 lakh growth during April to August 2026, implying an 18% year-on-year growth. The government has also approved another 1.9 lakh crore of capital outlay for Green Corridor Phase 3, which includes evacuation of 135 gigawatt of renewable energy and deployment of battery energy storage systems. All of this signals strong economic activity in India over the medium to long-term. This structural growth driver continues to reinforce the long-term opportunity outlined under the Project Spring. While the near-term inflationary pressures are surfacing due to macroeconomic situations, both urban and rural demand continues to remain healthy, While government support measures are expected to aid broader consumption growth going forward. Importantly, India's revenue waste remains predominantly domestic, which provides a degree of resilience in periods of global uncertainty. Continuing on the momentum, the company delivered yet another remarkable quarter of strong performance, underpinned by healthy revenue growth and profitability. Our performance reflects not only favorable demand conditions, but also the deliberate investments and strategic choices made over the past several years. The wires and cables business continues to see positive momentum, leveraging its market leadership and execution capabilities, while the AFMG business has outperformed the markets across categories supported by a growing product portfolio and a wider customer reach. The progress we have achieved is underpinned by strong execution across our strategic priorities and continued investment in our growth-fled crops. We remain committed to operational excellence, disciplined capital deployment, and creating greater value for our stakeholders and customers across every touchpoint. Looking ahead, we see significant opportunities across our markets. Our priority will be to accelerate our growth initiatives, strengthen our brands, deepen distribution, and build the innovation and talent ecosystem needed to support the next phase of expansion. To sum up, our outlook remains unchanged. While commodity, volatility, geopolitical development, and logistics-related disruptions may continue to influence individual quarters, the structural drivers of the demand remain firmly intact and in place. We remain focused on discipline execution of our Project Spring strategy, strengthening our market leadership position, and investing behind the significant long-term opportunities emerging across infrastructure, energy transition, manufacturing, urbanization, and exports. Now, we would like to update you with reference to the ongoing proceeding with respect to Azure Metals that we have filed and appealed before the Honorable National Company Law Appellate Tribunal, Principal Bench, New Delhi, and the Honorable NCLAB has stayed and kept in abyss the order of admission in its entirety, Including that of it being a commercial dispute of INR 2.79 crores to set aside the order of admission passed by NCLT and initiation of the Corporate Insolvency Resolution Process CIRP against the company. The company had gone for an early hearing on October 15, which is today, and we are of reasonable opinion that we have argued well on the hearing and are reasonably confident and hopeful that we have a strong case with grounds on merits and the judgment may land in our favor. We continue to monitor the situation and follow the due process as per law to get this resolved as quickly as possible. We do not expect any adverse or material impact on our financial or business operations arising from the site situation. I would now hand over to Aditya to take you through the financial performance for the quarter.

Thank you, Niyan. For the quarter ended September 30, 2026, we delivered an exceptional performance reflecting the strength of our diversified business portfolio, disciplined execution, and sustained demand across our end markets. Consolidated revenue grew by 53% year-on-year, with all business segments contributing meaningfully to this growth momentum. The company continued to maintain a strong operational performance during the quarter. EBITDA increased by 39% year-on-year, while EBITDA margins expanded by more than 50 basis points sequentially to 14.4%, supported by a favorable business mix and continued focus on operational efficiencies. Profitability remained robust, with profit after tax reaching a record high of Rs. 9,900 million, representing a 43% year-over-year increase. Pat margins stood at 10% for the quarter, reflecting healthy earnings growth and sustained margin resilience. Our financial position remains very strong. Net cash stood at 45.2 billion as of September 30th, 2026, compared to Rs.29.4 billion a year ago. We also witnessed a further improvement in our working capital efficiency with the average working capital cycle reducing to approximately This was aided by higher payable days arising from the increased use of letters of credit for our raw material procurement. As these benefits gradually normalize, we expect the working capital cycle to trend towards our long-term operating range of 45 to 50 days. During the first half of the year, we incurred capital expenditure of Rs. 6.1 billion, reflecting our ongoing investments in capacity expansion, supply chain capabilities, and future growth platforms. On a half-year basis, I am pleased to share that H1FY27 marked the strongest first-half performance in the company's history in terms of both top-line and profitability. Revenue grew by 46% year-on-year, crossing a significant milestone of Rs. 180 billion. EBITDA increased by 36% year-on-year, with margins remaining healthy at 14.1%, while profit after tax grew by 38% year-on-year, translating into path margins of 9.9%. Let me now turn to slide 6 and discuss the performance of our wires and cables business. The wires and cables segment delivered a strong quarter, recording 47% year-on-year revenue growth. Within this, the domestic wires and cables business grew by an impressive 50% year-on-year, driven by healthy demand conditions, strong channel execution, and favorable commodity-linked realizations. We delivered a volume growth of mid-to-high single-digit range on top of a strong base from the corresponding quarter last year, demonstrating the underlying strength of demand. Within the portfolio, wires continued to outpace cables in terms of growth. Channel sales also grew faster than institutional sales, underscoring the resilience and effectiveness of our distribution-led model. From a regional perspective, the West remained our largest contributor. Followed by the South, North, and East, highlighting the broad-based nature of growth across markets. Despite challenging geopolitical environment, exports picked up strongly during the quarter as sales grew 17% year-on-year and grew 85% quarter-on-quarter. While exports accounted for a relatively lower share of overall revenues, the moderation in contribution is largely attributable to the significant faster growth in the domestic market. which expanded the overall revenue base. We continue to maintain a strong export order, pipeline, and remain confident about our long-term growth prospects of this business. EBIT margins in the wires and cables segment stood at 14.2%. Margins improved sequentially, supported by a favorable product mix, and continued operational excellence initiatives. In line with our Project Spring roadmap, we remain confident of sustaining medium-to-long-term EBITDA margins within our guided range of 11-13%. Turning now to slide 8 and our FMEG business. The FMEG segment delivered a breakthrough quarter, registering a remarkable 124% year-on-year growth, with strong performance across all major product categories. Notably, this marks the 11th consecutive quarter of industry-leading growth, reflecting the effectiveness of our strategy, execution capabilities, and strengthening market position. Solar products, which constitute the largest category within our FMEG portfolio, continue to be the primary growth driver, registering multi-fold growth during this quarter. This segment continues to benefit from favorable structural tailwinds, including the PM Surya Ghar Yojana, various state-level support programs, and accelerating consumer adoption of renewable energy solutions. We remain highly optimistic about the long-term opportunity this category presents. The broader SMEG portfolio, comprising fans, lighting, switches, switchwares, conduits, pipes, and fittings, also delivered healthy growth. Performance was supported by sustained momentum in the real estate and construction sectors, alongside our focused efforts on product innovation, distribution expansion, and deeper customer engagement. This segment also achieved a major profitability milestone with EBIT margins crossing the double-digit mark for the first time and recording a 10.1% margin during the quarter. Since achieving profitability in Q4, FY25, the business has consistently strengthened its earning profile while continuing to invest in talent, product development, innovation, and brand-building initiatives. Looking ahead, we remain highly confident about the long-term growth trajectory of the FMEG business. Our objective continues to be growing at 1.5x to 2x of the industry growth rate while steadily enhancing profitability. Investments in distribution reach, product innovation, category expansion, and brand equity will remain central to driving sustainable value creation. Moving to slide 10 and our EPC business. The EPC segment reported revenues of Rs. 6171 million in Q2 FY27 representing a healthy year-on-year growth of 53%. Segment profitability remains strong at Rs.444 million, translating into an EBIT margin of 7.2%. Over the medium to long term, we continue to expect sustainable margins for the EPC business to remain in the high single-digit range, supported by disciplined project selection, efficient execution, and a healthy order pipeline. In closing, I would like to sincerely thank all our stakeholders for their unwavering trust and continued support. The performance delivered during the quarter reflects the strength of our business model, the commitment of our teams, and the success of our long-term strategic investments. As we look ahead, we remain focused on executing our growth priorities, enhancing operational excellence, and creating sustainable value for all our stakeholders. With that, we conclude our prepared remarks and would be happy to take your questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Kevin Shah with Aritya Billamani. Please go ahead.

Thanks for the opportunity and congratulations on that. So, firstly, on the FMEG margins, so if you see the 10.1% is already at the upper end of your projects in Travis. So, to you, I like what are the key drivers behind it and which of these segments are profitable?

Thank you, Kevin, for your question. For the SMEG margin question, I think there are a few things that have worked for us in this quarter, and probably the kind of initiatives that we have put together over the past few years, and those strategies are actually reaping benefits. Now, definitely scale has increased in this quarter, and as I mentioned in my previous comments, all segments in the quarter have actually grown by multi-folds, beating the industry growth rates. So that's very much a positive sign for us that all the categories are firing at all cylinders with kind of the strategies that we are implementing. So that's the first part. I think the scale definitely plays an important part, and definitely the operating The second part, I think, to answer to that margin expansion of 10.1% is premium mix has also gone increased in this water for various segments. Today, if you see, the fans mix is around 33% in the premium category, and the lights also now reaching at 38%. So, all of this is actually contributing to the margin growth. And the other strategic thing that we have been doing in this segment for past year or so is providing a more solution-driven approach for our portfolio, right? So today, as you see, we have been, you know, as we have already mentioned previously in various calls, the kind of strategy that we are putting together, especially in terms of the building verticals, you know, these FMG products are actually complementing to the way we are, We are approaching the end customers. So, it's the kind of bouquet offering that we are doing and it is reaping benefits for us. So, I think there is a scale, that is why you see the kind of margins that we have generated in SMEG. So, all these strategies together is reaping benefits because if you see earlier also our strategy was largely on pan-India basis. Today the strategy has moved to regional specifics. And given the kind of P&L strategy that we have, you know, that is driving a lot of, you know, profitability, you know, the availability of the products in the market has improved, you know, various strategic initiatives that we have implemented, our Kali Ratna plans that we have put together in the market is also sort of complementing to this. So I think all of this synthesize is getting us the results for SMEG. To answer to your second question on the growth, I think when we started the project spring and we laid out our margin profile, I think it's for FY30, right? So over the market, I believe we would end up in that kind of a range of 8 to 10% of the EBITDA margins. Today, we are already at an EBITDA margin of 10.1%, which is very high. I would believe we would appreciate the kind of efforts that we have put together to get this

And just a follow-up on the margin point of wire and cable margins also there has been a significant. How much of it do you see it as sustainable given the potential increase in the competition and the distribution?

To look at the margins, overall, I think it's a confluence for co-five things that we have already highlighted in the previous call. It's definitely operating leverage has a play into it. If you see our margins, overall margins have expanded around 90, which is point sequentially. So there is the operating leverage that is playing into this sector, right, in this segment. Definitely, the business mix is playing an important part. Viars have grown far more better than the cables, so that's a high-accretive margin business for us. Definitely, channel has also been better than institutional. So, these are four or five things that are very important, and if you see the kind of exports, you know, growth that we are also having, that is also sort of supporting to a certain extent. So, I think we are very much happy the way Today we have delivered, you know, the kind of initiatives that we have put together and it is visible in the results at the moment and it's 14.4% overall margins. We have wires and cables at 14.2%. It's a remarkable story, Kevin.

And secondly, in terms of the potential of the new supplier that is coming into the market, so what is the downside or risk that you see to your project spring targets?

In terms of the growth as well as margins? So, Kevin, you need to understand that the guidance that we have provided is for FY30, right? So, it's a CAGR approach that we have taken in terms of formulating these growth rates, right? So, you may see in some years you will find the margins have actually gone in the high single digits. Some years you may find it at a very high margin or double digits. So, I think we would like to be in that guidance range, and that's how we continue to maintain our stance over guidance.

Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer questions from all participants, please limit your questions to two per participant. The next question comes from the line of Sonali with Jefferies India. Please go ahead.

Thank you for the opportunity and congratulations on a very strong set of numbers. So, my first question is in cables and wires, domestic, you have grown 50%. Overall, you have grown 47% revenues. Here, Mark, what could be our volume growth and what could be our value growth for that?

Thanks, Surali, for this question. I think in terms of the volume growth, I think as I alluded in my previous comments that cable and wires definitely has done, you know, has grown really strongly for us in this half as well. In terms of the volume growth, I think overall, volumes have grown by mid to high single digits. Breaking down into the cables and wire segments, I think wires have grown in early double digit growth in terms of the volume, and cable has been in the mid single digits. So, that's the kind of breakdown that we have in terms of the volume.

So, that's a great number considering our base of last year was very strong.

Yeah, I mean, thanks for, you know, highlighting that. I would like to reiterate the fact that last year, you know, it was a very, very, very strong base, right? 18% volume growth and cables have actually grown around 20%. So, I think on top of it, you know, we are growing at that kind of growth. We are very much happy.

Great. So, my second question is regarding your commentary on the IBC hearing today. Sir, please correct me if I am wrong in my understanding, but today there was only argument, right? So, the final outcome is not yet out. So, do we have a next hearing date?

Just to give, I think, a clarity, I think the entire case has been heard today, and now probably we have to wait for the actual order which has to come. So, we will leave this matter, you know, here. We expect the order to be announced, you know, in whatever time I think it takes by them. Sooner the better, you know.

Understood.

It is completed and the order is reserved.

I understand. So any timeline or we will just leave it to the time that they require?

I would not like to hazard a guess on the timeline but obviously as a company we would certainly do the best to see how fast we can get the order. It is definitely something which we will be focusing on.

Absolutely, sir. Very clear. Thank you for the replies and wish you all the best for the festive season ahead as well.

Thank you. Thank you.

The next question comes from the line of Umang Mehta with Kotak Securities. Please go ahead.

Hi. Thanks for the opportunity and congrats on a strong Kotak. My first question was again on margins. You've done 15% ballpark EBITDA margin in Ryzen Cables in the first half. Now, I understand 11 to 13 is your long-term guidance, but from a second half or a more one-year perspective, how are you looking at profitability? And also, if you can share some comments on the new entrant and how are you kind of approaching or maybe looking to defend our shares? Thanks.

Thanks, Umum. I think, as I mentioned earlier, you know, when you look into the margins, I think there are, it's a conference of four, five things that combine together. Your channel has to grow more than your institutional business, your wires have to grow more than your cables, right? And that's how, so the mix plays a part here. And definitely, in this quarter, we have seen some kind of an operating leverage that has come into play. You would also note The fact that copper prices have also been very high of late in this quarter as well, so that's also kind of helping us to sort of get on an absolute basis, right, the values on an absolute basis. So, I think overall, I think we are happy with the kind of margins that we are generating. Second half also looks very promising, and it's largely driven through the kind of demand that we are seeing right now. We are seeing healthy growth in the second half as well. And based on that, I think the kind of initiatives that we are putting together as a group in terms of each category are giving benefits for us. So I think we will continue to operate at a level. We would be happy to operate at a higher end of the guidance that we've given. But as you know, there are different seasonalities, different periods of years where fluctuations will happen. And that is the reason why we stick to our long-term guidance for FY30. Now, coming to your question on the competition, you know, Ultratex entry, I believe that's the tier that you have been referring to. So, the entry into a particular category of wires market is today is a very small portion of our overall business, right? If you see the overall cable and wires business, the market is roughly around 1.1 lakh crores, right? And wires is roughly around 30% of that market. Even in that market, 30-35% is still unorganized. So, there is enough room, and the kind of growth that we are seeing in this segment, there is enough room for few players to come and take some pie out of the share. However, we don't see any real competition in the near term, simply because that wires market is still a very small part of our overall business. And the heat is on the ones who are viable. So for us, NUQA is operating at a very high margin. So I think if you look at the overall industry, the market is also going to grow in the next two to three years to around maybe 40,000-50,000 crores. And with that, you know, the kind of capex that Ultratech has put into this industry, the kind of revenue guidance that they have given close to around potential of around 6 to 7x, you know, it looks elusive at the moment, but I think that again is a very, you know, small part of the overall market. So I think there is an execution play over here and we definitely acknowledge the big house and its capability. We will continue to sort of closely watch our competition as we have always done. And just to highlight that over the past every year, we have already gained market share around 1% every year. Last year only we gained 3-4% points. So, I think we are doing the right things in the market. We are, you know, tapping the right spaces, and then I think that's how we are going to approach as part of our project.

I understand. Just a follow-up. So, fair to say there is no action in terms of pricing or anything from your end yet, right, in response to… As of now. Sure, sure.

We are moving ahead with our plan, so, yeah.

Sure, sure. Got it. And just one second one was on two growth. One was exports, any outlook from a full year growth perspective, and second one was on data centers. So, OSCs, there is a big opportunity there. So, anything you are looking to do on that side?

Yeah, thanks. Yeah, I think among good views, I pointed out that, you know, exports is a very, you know, untapped market for India, right, and it is a very important growth driver for us. It is doing exceptionally well for us. It is just that the geopolitical situation has dented some of the, you know, bookings for us, and obviously there have been issues with the supply chain globally, where shipping lines have actually, you know, moved ahead 10 to 12 days. So that's the kind of impact we are seeing. But if you look at our numbers, you know, comparing with quarter one and what we have achieved in quarter two, we have gained around 85% increase in our quarter to quarter growth, right? So, we are pretty much confident that we have a very strong order book in place. Big markets for us, US, Europe, LATAM, Asia, all are contributing significantly to us. And if you see last year, today we are at 94 countries. Last year we added around 10 countries in our portfolio. So, we have a very diversified base in terms of exports. So, today I think Chile probably Finally, I would like to highlight that Chile was one of the countries that also contributed this time in our export revenue. So, last quarter, if you see, Oman, Saudi had contributed significantly to our Middle East mix. So, I think that's very encouraging to see that we are getting all kinds of demand from these economies and countries. So, we are very happy with the kind of growth that we are seeing in exports and we are very much confident with the kind of I mean, obviously there is a risk element of Mr. Trump, but yes, I think we are very much, you know, very confident on the growth prospects. Now, sorry, coming up on the data center thing, I think if you see, data center definitely is a big market and a very big opportunity for everyone to crack, right? As we have already highlighted that we are working towards this segment as well. Our innovation R&D team continuously works to find the right product. And as you are aware, we are any which way supplying the conventional part of the data center. Today, if you see, the market is around 1.6, 1.7 gigawatts of capacity in the data center. Some reports have suggested it would go to 8 to 10, some probably 15 gigawatts. So, there are a lot of announcements that are happening, both in terms of the private and in terms of the government side as well, but we will need to see the kind of execution that will happen. Yes, there are some pockets in the regions where private CAPEX is getting added in different regions with 10 megawatts, 50 megawatts, but I think data center is a very big opportunity for us. So, I think we are, we firmly believe the kind of capabilities and the distribution network and the kind of product portfolio that we have, we will certainly be able to sort of capture that market in soon.

Okay. Thank you so much and all the best.

Thank you.

The next question comes from the line of Ashish Kanodia with Siti. Please go ahead.

Yeah, thank you for the opportunity. The first question is on the full year volume growth. How should we think about it? Because, you know, second, especially if you look at the 3Q base, that's very high. So, from a, you know, volume growth perspective, do you expect more like a, you know, mid to high single digit volume growth on a full year basis? And within that, most likely, you know, 3Q could be slightly soft and then 4Q benefits because the base will also be lower.

Yeah, I think Ashish, you are rightly pointed that Q3, definitely last year, last quarter, Last year, we had a very high base, right, around 40-45% of growth that we registered in last year, so that base is going to be high in third quarter, but when you look into the volume growth, I think it's not right to look at it in a sequential basis. What we have called out already as an anchor to look into the volume growth is that whatever the market grows, we will do 1.5x of that in cable and wire, right, so if the market, if you look at the GDPR prints recently, it's at 7.8%. If that kind of market continues, you know, the wire and cable definitely is going to grow at around 12-13% and we will do 1.5x of that. So that's a long-term way of looking into the volumes. I think you should also look at more on a 10-12 month basis. I think quarter-to-quarter is not the right way to think about it. But so if you look into the 12-month trailing basis, we still, I think, believe we are doing a reasonable sort of volume growth over here.

Sure. And second question, on the EPC side of the business, I think, you know, last time you shared that overall, I think, you know, for BharatNet, maybe 800 to 1,000 crore and maybe RDSS, 800 to 1,000 crore execution this year. So just wanted to check, are we still, you know, working with the same number or do you think that execution might improve and we might do better than what we have guided earlier?

So, I think you see the nature of EPC business is like, you know, it's all milestone-based, right? So, we will continue to sort of getting orders in terms of the two projects that we are doing in terms of BharatNet and RDSS. So, I think EPC remains in a similar order book profile. Roughly, the order book, I would say, it is close to around 9,000, 10,000 crores.

Got it. Got it. And just last one, between wires and cables, anything to highlight here? Like, you know, what led to wires kind of outpacing cables? Because from an underlying demand point of view, of course, you know, you see more, you know, at a macro level, the demand driver are much stronger for cables. So was it largely just because of maybe some inventory stocking at the channel level? Or was there any other reason why, you know, like cables relatively grew slower than wires?

So, Ashit, I think the growth is largely coming from the demand that we are getting from the different manufacturing and the other mobility side of the space as well. You know, the real estate market continues to be strong. It's not slowed down to that extent. If you see today's year-over-year number in terms of the launches, it's still up 4% as per the latest numbers, right? So, today we are serving the real estate market demand of 2024, right? 3.8 lakh units were sold and launched during that time. A similar number we saw last year as well. So I think real estate market which takes major chunk of our manufacturing end market is reasonably strong. And what happens is that you also should look into the fact that the government is putting a lot of initiatives and schemes in the manufacturing sector. If you see the 8 pay commission is yet to come, that is yet to sort of add another layer of demand towards that. I think there's a lot of demand that is there in the real estate market as well, and so wires are actually contributing to that side as well, and it is very difficult to quantify the end market for a cable and a wire business simply because I think some of the wires also act as an ancillary to the cable, right, it also goes to various different industries, so I think overall demand remains very very very much It's healthy and strong, and that is the reason we are seeing these kind of numbers in our quarter.

Sure, sure, Avid. That's helpful. Thank you and all the best.

The next question comes from the line of Achal Nuhadeh with Nuwama Institutional Equities. Please go ahead.

Yeah, good evening. Thank you for the opportunity. Congratulations on an excellent show. Two questions. First, you know, with respect to the institutional segment, you know, While, obviously, most of our sales are through the distribution channel, but are you seeing any delay in off-take given the substantial increase, QOQ we have seen in copper-aluminium prices? Has that been the case, and how are you seeing the impact of the sharp decline in aluminum price in last two weeks?

No, I think Achal, we are not seeing any significant movement with that respect because if you see, copper prices have only gone up 6% quarter to quarter, right, and aluminum has actually come down. So, whenever that happens, you know, there will be a restocking and a destocking event. Whenever these copper prices will increase, the restocking will happen. And usually what will happen is that we will pass it on to the end customer. For cables, we do it in a month, and for wire, we do it every fortnight. So that is the only play over here, and I think we have not seen any significant pickup in the inventory or channel stocking as of now, because obviously copper price is still at a higher level, but we are not seeing any meaningful deviation to what we have seen in this quarter.

Got it. The second question, you know, this is on the balance sheet. If you could clarify, you know, we see a 12.5 billion kind of line item in the cash flow statement. If you could, you know, explain the nature and, you know, if that is, if there is any one-off and this will get reversed in the coming quarter.

I think there's no one-off access over there. These are just a part of the kind of the advanced events that we have made towards procurement of some of our inventories. So that is the kind of number you are seeing, the high number, 1,200 crore, roughly number that you are seeing in the cash flow statement. So nothing one-off over there.

Got it. Thanks. I'll fall back in the queue. Thank you.

The next question comes from the line of Akshay with UBS. Please go ahead.

Thank you for the opportunity and congratulations on the great set. Wanted to understand on the export side in terms of what kind of cables you're seeing a broader acceptability globally from Indian cable manufacturers, and if you can distinguish this between LV, MB, and HV cables, and secondly, on the revenue, like you alluded, H2 is also looking strong, so can we assume like the quarterly revenue which you have achieved in quarter two, the revenue run rate is sustainable, while next quarter, maybe YY volumes base will be high, but this revenue run rate is sustainable, I think I will take the second part first.

In terms of the revenue, obviously, the copper prices are at a level where you will always see that they will eventually benefit us at our EBITDA level, right? So if copper price, nobody has a view on copper right now. There is a global deficit for sure, but we per se don't have a view on copper and we never do that, right? So, whatever copper prices happen, the good part is that we are not exposed to the kind of volatility that we see. So, everything we just work on a cost-plus model. So, if these copper prices continue to stay at this level, the only conclusion I can give to you is that the demand is very strong. That's the reason it's getting absorbed in the market. So, if If copper prices remain at a certain level, you know, it's already up around 30-45% on an average throughout this first half of the year, right? So this keeps, and if you see, actually the copper prices started to tend towards 10,000, 12,000 from November of December last year, right? So there will be some point where the base will also get, you know, affected in that spotting. I mean, we would not like to guide in terms of the revenue growth, per se, but it's anyone's guess of how copper price is going to be.

And, sorry, what kind of products are you seeing more acceptability in global market?

So, for exports, Akshay, I think we, today we are doing all the conventional part of the cables that we do, right? These are all Insti-based business. So we are doing MVs as well. So the volumes that we share is quite reasonable. The mix is towards that. That's the only guide I can give to you. Because it is very difficult for us to guide what will be the end market. Today, taking the US as an example, we are working through our market reps. So, there is a certain level of institutional demand play and they have a strong holding into the end markets in the US and the deep pockets they have a demand. So, at the end of the day, we would not be able to gauge where these cables are actually going, but there is a definite demand from data center and AI and energy transformation that is happening in the US. So, these are the kind of cables that we are, you know, pushing towards our institutional business.

Got it. Thank you.

The next question comes from the line of Ashish Chan with Macquarie. Please go ahead.

Yeah, hi. Hi, good evening. Look, Ashish, my first question is on, you know, cable and wire margins. Like, you know, in the last two, three quarters also, with such high copper prices, we have been able to maintain margins in 13-14% band. But long-term, we are still holding 11% to 13% range guidance. So, is that largely on competitive intensity or is there something else there or are we just conservative here? How should we think about it?

No, Ashish, as I alluded to my previous comments, you know, we are not taking any initiatives as of now in terms of competition per se, right? We don't need to do that. The only thing, right, I can sort of give you that whenever you think on the margins, I mean, as I said, there's a conference of four, five things in place. You know, there is a kind of mix that plays into the fact, every year you may see a mix getting changed, right? Last year if you see, cables outpace wire. Today what we are saying is that wire is outpacing cables. So that mix will keep changing and it will play with the margins as well, right? Exports, if you see, today it's a very high margin business, right? Today as a percentage of our overall revenues, it's still at 5%, right? Early previous quarter, last year it was around 6.5%. Because the domestic demand is high, you will see that number, You know, slightly lower optically. But if you see a couple of years back, we did export, did actually contribute around 7-8%. Right. So these mix will keep changing and that's why, that's the reason why we say we have, when we published our project spring targets, we did some simulation around it. So if all things come together, definitely we will see margins going to north of what we are seeing today. Today in this quarter also, there is a certain amount of operating leverage that we have got. Our business mix has improved, you know, the channel is done better than institutional, and there is a certain level of premiumization theme that is going, which is driving some part of it, right? So, I think all these things combined is getting up these kind of margins. But over the longer term, you will always have to look in the perspective that it will normalize to a certain level, right? So, that's how we should think about it.

So, an extension of that, so in second half also, do you think wires could continue to

I mean, we would not like to give any guidance on that. We have not, we never share that kind of a guidance. We have to wait to see how demand shapes up in the next quarter or so. So, these will keep changing, Ashish. So, it's very difficult to say if cables are going to outpace wires in the next quarter or so. So, I think that's not the right way to think of it. Today in In the first half, definitely wires have done better than cables, but there's a lot of play around it, so I think we can't give you on record that, you know, on the kind of growth in each segment that we see.

Thank you so much.

The next question comes from the line of Rabindranath Nayak with Nirmal Bank Securities. Please go ahead. Mr. Rabindranath, your line has been unmuted. Please go ahead with your question.

Okay. Am I audible right now?

Yes.

Yes, you are. Thank you. Thank you very much, Aditya. My question, did you mention that what is the unorganized competition, unorganized market in the wire segment currently, housewife segment?

So, we don't, Ravindra, we don't really share that kind of a breakdown.

No, no, I am asking the industry, unorganized market right now, in the housewife.

So, wires market is roughly around 30% of the overall pie. So, you can do the math and…

One pie?

It's 30%. It's 30% of the…

Okay, 30%. Okay. So, our share would be, houseware would be 30%? We don't give… In terms of revenue?

Okay. We don't give a breakdown of our market share based on our segment. On a combined basis of cable and wires industry, Even in the organized market, we have given out, called out in our annual report, that our market share is around 30 to 31 percent.

Okay. No, that's why I agree, but I'm just talking about only the housewife's income, that's why I'm asking.

Dabinder, we don't give...

Okay, no problem. Thank you very much. Thank you. Thank you.

All the best.

The next question comes from the line of Vidit Trivedi with Asian Market Securities. Please go ahead.

Hi, sir. Thank you for the opportunity and congratulations on great set of numbers. Most of the questions have been answered. Just wanted to check on the EHV side of the business. When can we expect it to be commissioned, and, you know, when can we expect it to start contributing to the top line?

I have a chance. I'd like to thank you for asking this question. So I would like to take this opportunity to sort of also let the investor community know that in terms of our EHV plan timelines, And we are expecting the ESV plan to now commission somewhere in FY20, the next year, FY208. And the contribution will start? The reason is that, the reason it may happen that the commissioning may start in April, it may start in May. So that's the reason why we are giving you the timeline of the next year of FY208.

Got it, got it, thanks a lot. And just lastly, on the competition side, so I, you know, we went out for a channel check out in the market. So, the competitors, wires have started coming out in the market, and they have strategically positioned themselves at least 10 to 15% lower to all the existing players. So, what are you picking up from the ground? What's the, what are the major areas they're supplying to? Did you just initial comments on that?

So with it, I think you have your own channel checks and we have our own channel checks, and I think that kind of margin, what you are referring to, probably, you know, not in terms of class 2 hours, right? I mean, that's the overall essence that I have. Your channel check is different to probably us. We have a larger set of channel checks and distribution network. We are not seeing any sort of pricing correction right now.

Got it. That's very helpful. Thanks a lot, and all the best. Thank you.

The next question comes from the line of Rahul Agarwal with Ekigai Asset. Please go ahead.

Yeah, hi. Thank you so much. Good evening. Just a couple of questions. Firstly, on the solar business, which is part of the FMEG, just wanted to appreciate growth for this segment a bit better. Firstly, you know, what is the type of products Solicab is doing on the solar rooftop side? You know, if you just explain the nature of the product, what are the bought-out items and what are we manufacturing in-house? And second is, you know, I understand that the salient exact mix is not available, which I understand. But as you said, it's majority of it growth rate is coming from solar. So, some bit of sense on the order book, on the revenue run rates going forward on solar will help us better appreciate what's happening with, you know, the appliance business, which is the fan, conduit pipes and senior business, and then, you know, the balance on the solar side. So, that's these two questions on solar side.

So, on the first question, first part of the travel is we are only doing inverters in the solar category. So, that's largely a trading business for us and that's the only category and the model that we have in our solar business and it is growing multifold to be aware of. There is a very strong demand in the market and we are getting this segment grow far more better in terms of the growth that we have seen. And that is also driving the overall SMEG business. Now, to come to a second part of your question is that, as I alluded in my previous comments, all six categories in the SMEG business are actually growing significantly stronger today, right? So, it is not just one particular segment that is driving results, but all the segments, including your lightings, your switchcares, your fans, your pipes and conduits, every category is beating the industry growth. So, I think that is very, you know, ECMA very much stronger and it is a kind of turnaround that we have done in this business.

So, just to follow up, so on solar which is included in SMEG, we are just doing bot outs for solar inverter. We are not actually getting into the solar panels or solar rooftop installations. Is that correct?

Yes, as of now we are not doing any manufacturing side of it. Whenever we believe that there is an opportunity out there, we will definitely not shy away to do that piece as well. But today, we are just doing the inverters.

And if you could just give some guidance on, you know, how should we look at any run rates for this business?

I think, Rahul, the kind of growth that we are seeing in SMG, we are very much confident that, you know, we would love to do this kind of a level, and we are very much confident that this growth is probably going to, you know, increase, it's a mix, this segment's entire mix to our portfolio is certainly going to grow.

Got it. And just one question for Nikhil, if you would answer. You know, on the copper sourcing side, I understand Polycap does 100% of imports on copper. And globally, you know, we've been reading reports around copper supply demand mismatches for various multiple reasons. You know, where pricing nobody really knows, but in terms of your own sourcing plan, how would you think with more longer term, you could share some thoughts around next three to five years? You know, we continue to do 100% imports. Are we looking at domestic sources? And, you know, how could that impact industry growth in case, you know, copper is really short of supply into Indian markets for cable and wire? So, any thoughts around that will really help. Thank you.

We are out. So, the only thing that I can sort of guide you towards the fact that, you know, today we are doing 100% of copper and market dynamics, you know, suggest today that it's beneficial for us doing this. We never know how the mix is going to go in future. Nobody knows the sourcing part of it, right? Today, if you are sourcing some plant from some part of the country and that country's shipping lines can disturb, obviously, any business you would try to navigate to. Today, we are not seeing any such sort of arrangements. We are happy with the kind of arrangements today we have in terms of a copper swooping. So, today, everything is important right now.

Thank you so much, and all the best, and wish the team happy to have to be one.

Thank you. Ladies and gentlemen, that was the last question for today. I now have the conference, Suwatu Mishra Niyanth, for closing comments.

Thank you, everybody, for the questions which you have raised, and I hope we have been able to give a proper answer. I would also like to wish all of you a very happy Diwali and a prosperous new year coming ahead, and good luck for the season. Thank you. Thank you.

Thank you. On behalf of PolyCab India Limited, that concludes this conference. Thank you Thank you for joining us and you may now disconnect your lines. Thank you.