In This Article:
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EBITDA Margins (Wires and Cables): Targeted sustainable margins of 11% to 13%.
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International Business Revenue Share: Aim to grow to over 10% of overall company revenue.
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CapEx Investment: INR60 billion to INR80 billion over the next five years, primarily for the wires and cables business.
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FMEG Sector Growth: Expected growth of 8% to 10% in the near to midterm.
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EBITDA Margins (FMEG): Targeted margins of 8% to 10% by FY30.
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Dividend Payout Ratio: Plan to increase to greater than 30% by FY30 from the current 26.5%.
Release Date: January 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Polycab India Ltd (BOM:542652) is targeting to grow its wires and cables business at 1.5x the market growth, with sustainable EBITDA margins of 11% to 13%.
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The company plans to increase the share of international business to over 10% of overall revenue, supported by a significant CapEx investment of INR60 billion to INR80 billion over the next five years.
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Polycab India Ltd (BOM:542652) is focusing on expanding its presence in high-growth sectors such as electric vehicles, data centers, and renewable energy, which are expected to drive robust demand for wires and cables.
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The company is implementing a strategic roadmap with six pillars, including solidifying market leadership in B2B, propelling B2C expansion, and ramping up international business.
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Polycab India Ltd (BOM:542652) is committed to increasing its dividend payout ratio to over 30% by FY30, up from the current 26.5%, reflecting a focus on rewarding shareholders.
Negative Points
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There has been some softness in growth due to a slowdown in public CapEx, which could impact demand if it continues.
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The company faces challenges with commodity price fluctuations, which have led to inventory adjustments and impacted sales in the short term.
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Polycab India Ltd (BOM:542652) acknowledges the risk of overcapacity in the industry if demand does not keep pace with the planned capacity expansions.
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The company is cautious about the potential impact of geopolitical factors, such as import duties in the US, which could affect its export strategy.
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Despite ambitious growth plans, the company maintains a conservative long-term EBITDA margin guidance of 11% to 13%, indicating potential challenges in sustaining higher margins.
Q & A Highlights
Q: How do you see the overall industry growing given the recent softness in government spending on cables? A: Chirayu Upadhyaya, Investor Relations: The demand environment remains healthy despite a recent slowdown in public CapEx due to elections. We expect long-term growth driven by the government's vision for India's development by 2047. We plan to invest INR60 billion to INR80 billion in CapEx over the next five years, anticipating industry growth at 1.5x to 2x of real GDP.