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Market Leader Series: A Deeper Look at Polycab India's Financials

Updated: Nov 20, 2020

Instagram: @hvinvesting

This is the first part of the Market Leader Series, in which I'll discuss companies that lead their respective sectors.

In this article, we discuss Polycab, a company with strong growth in sales and profits, rapid expansion in operating margins, low debt, high promoter holding, no shares pledged, and stellar return on capital employed over the years. The earnings quality and working capital management, however, have scope for improvement.

At the outset, please note that this article is only for informational/educational purposes and in no way meant to be a stock recommendation or financial advice. Please conduct your own analysis or consult a SEBI registered investment advisor before you undertake any investment action.

Polycab is India's leading manufacturer and supplier of wires and cables (W&C) with an18 per cent share of the organised market. This makes it a market leader in the segment. The company's product portfolio includes power control, instrumentation, building, solar, communication, welding, rubber, railways signaling and specialty cables.

Polycab Analysis Wires and Cables
Wires and Cables; Polycab's Investor Presentation

Other prominent companies in this segment are Finolex Cables, Havells India, KEI Industries, RR Kabel and others.

Besides W&C, Polycab's other, relatively newer business segments also include FMEG or fast moving electrical goods such as electric fans, switches & switchers, LED lighting and luminaries, solar products, water heaters and more.

The company entered in this segment only in 2013, and therefore is a late entrant in a market dominated by the likes of Havells, Bajaj Electricals, Crompton Greaves, Finolex, Orient Electric, Surya Roshni, V-Guard Industries, Usha International and more.

FMEG; Polycab's Investor Presentation

The company's other, relatively minor segment includes EPC or engineering, procurement, and construction business.

Under this, it provides turnkey solutions for power distribution and rural electrification projects.

As a proportion of total revenues, the W&C segment comprises 84 per cent, FMEG 9 per cent, and others including EPC comprises a tad higher than 7 per cent.


As you may have realised by now, Polycab operates in a highly competitive industry.