Polycab India Ltd - Information Note

Source: RHP, 5paisa Research; *EPS & Ratios at higher price band; ^non-annualized 9MFY19 numbers; PAT includes minority interest

For additional information and risk factors please refer to the Red Herring Prospectus. Please note that this document is for information purpose only

Key Points

As per Crisil Research, Polycab is the largest wires & cables manufacturer in India in terms of segment revenues. It has a market share of ~18% of the organized wires & cables industry and ~12% of the total wires & cables industry in India in FY18. Polycab is one of the faster growing manufacturers in the organized wires & cables industry over FY14-18. Its extensive range of wires & cables encompasses power cables, control cables, solar cables, etc. and also includes welding cables, railway signaling cables, green wires, etc. catering to needs of retail and institutional customers, respectively, in different industries. As per Crisil, the Indian wires & cables industry is expected to post 15% CAGR to reach an estimated Rs1.03 lakh cr by FY23 and the company intends to capture this opportunity by leveraging on its brand, product quality and strong distribution network.

The company is engaged in production and sales of portfolio of wires & cables and FMEG including electric fans, LED lighting & luminaire, switches & switchgears, solar products and conduits & accessories. Its products are used in the power industry and a range of other industries, including petrochemicals, metal & mining, communication and railways, shipbuilding and construction among others. Since its diversification into FMEG in 2014, the company has been able to transform itself from a pure B2B company to a B2B and a B2C company. As per Crisil, the Indian Switches industry is expected to register CAGR of ~9% to ~Rs6,200cr, the Indian lighting and luminaire industry is expected to post CAGR of ~7% to ~Rs30,100cr and Indian electric fan industry is expected to record CAGR of ~ 7% to ~Rs11,100cr. This provides the company with good opportunity to leverage on its brand strength and distribution reach.

Key Risk

Significant increase or fluctuations in prices of, or shortages of, or delay/disruption in supply of primary raw materials could affect the estimated costs, expenditures and timelines. This may have a material adverse effect on its business, financial condition, results of operations and cash flows.

Exposure to foreign currency fluctuation risks, particularly in relation to borrowings, import of raw materials and export of products, may adversely affect its results of operations, financial condition and cash flows.

Research Disclaimer