Future plans for innovation and expansion
Polycap India: The success of any country depends on a strong foundation, and the Fast Moving Electrical Goods (FMEG) industry plays a critical role in building just that foundation. Polycab India Ltd, a leader in this field, is a good example of this contribution.
The FMEG industry meets the ever-growing demand for electrical appliances, wires and other necessities that power homes, industries and cities. From the essential wires and cables that carry electricity throughout a building to the sophisticated fans and switches that control flow, FMEG products ensure comfort, safety and productivity.
Polycab Ltd is at the forefront of the industry through innovation and commitment to quality. Our extensive product portfolio of wires, cables and electrical products addresses the diverse needs of modern architecture and living.
Thanks to continuous efforts and dedication, the company achieved good results this year, resulting in a 94% increase in its stock price compared to the previous year. Come and learn more about our company.
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Industry Overview of Polycab India
The Indian wire and cable (W&C) industry, estimated at Rs 680-730 billion in FY23, is seeing strong growth driven by several megatrends. The government’s strong focus on infrastructure development, with a budgeted capital investment of ₹10 lakh crore in fiscal 2024, has been a key growth driver. Sectors such as power, rail, real estate, renewable energy and defense have been major beneficiaries, driving demand for W&C products.
The residential real estate sector is on an upward cycle with home sales hitting a nine-year high in 2022 due to factors such as low interest rates, government initiatives such as PMAY and the need for larger homes due to the work-from-home culture. This has increased the demand for home appliances such as wires and cables.
The government’s goal of achieving 500 GW of installed renewable energy capacity by 2030 is expected to create significant demand for transmission cables. Additionally, growth in IT and telecom sectors is driving the demand for fiber optic cables due to surge in data centers, 5G transition, and increasing adoption of Fiber-to-The-Home (FTTH) connectivity.
Organized players in the W&C industry have been increasing their market share on the back of increasing consumer awareness and pandemic-induced disruptions affecting smaller players. Globally, India is emerging as an attractive destination for companies seeking to diversify their supply chains, providing export opportunities for Indian W&C companies.
In the Fast-Moving Electrical Goods (FMEG) segment, megatrends such as premiumization, India’s demographic dividend, government initiatives such as housing for all and smart cities, and the rise of smart homes are driving growth. Organized players are focusing on innovation, efficient distribution channels, and alternative sales modes such as e-commerce to gain market share.
Polycab India Company Overview
polycap india Ltd is engaged in the business of manufacturing and selling fast moving electrical appliances (FMEG) such as wires and cables and fans, LED lights and luminaires, solar products, switches, switchgear and accessories. The company was founded on January 10, 1996 and is headquartered in Mumbai, Maharashtra.
The company has 25 manufacturing facilities, including two joint ventures with Techno and Trafigura. These manufacturing facilities are located in the states of Maharashtra, Gujarat and Uttarakhand and the union territories of Daman and Diu.
Polycab Ltd exports its products to around 70 countries and has 2,05,000 retail outlets connecting consumers. Currently, they occupy 24% of the market share. of the overall product mix 88% It is fixed with wires and cables, 7% FMEG holds the rest. 5% It is part of the EPC division. Polycab India Ltd was listed on the Indian Stock Exchange on April 18, 2019.
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Financials of Polycab India
In fiscal year 2023, Polycab Limited recorded significant revenue growth reaching $14,107 million, up 15.60% compared to $12,203 million in fiscal year 2023. After analyzing the three years from fiscal year 2021 to fiscal year 2023, the company showed a good compound annual growth rate. (CAGR) return is 16.91%.
Additionally, Polycab Ltd in FY 23 increased its net profit margin by 51.70% to 1,282.25 crores compared to 845.23crores in FY 22. This increase in sales and net income was driven by a variety of increased demand. infrastructure It includes projects across industries, the real estate sector, private capital expenditures, and more.
Polycab also increased its domestic market share in the organized cables and wires market to around 25-26% from 22-24% in the previous year, which helped drive 30-40% volume growth in the segment. In fiscal 23, Polycab maintained favorable financial metrics with a return on equity (ROE) of 21.06% and a return on equity (ROCE) of 28.06%.
Polycab India’s future plans
Polycab Limited plans to invest Rs. We are investing $10-11 billion annually over the next two to three years to expand our manufacturing capabilities across various product lines such as extra high voltage (EHV) cables, special purpose cables, international business cables, and fiber optic cables (OFC). This includes setting up a new EHV cable manufacturing plant in Halol, which is expected to be operational by the end of FY26.
Polycab has secured orders worth around 5 million rupees. $48 billion will be spent under the government’s Revamped Distribution Sector Scheme (RDSS) scheme for distribution projects, which are expected to be implemented over the next three to four years.
Additionally, the company continues to focus on launching new premium product lines across categories including wires, fans, switches and switchgear to drive premiumization and improve profitability.
Polycap plans to make changes to its Fast Moving Electrical Goods (FMEG) business over the next two to three quarters to improve execution, distribution network, new product development, and influencer management, aiming for a growth rate better than the industry average.
Polycab plans to announce a new medium-term target plan this financial year, following its previous Project LEAP target of achieving Rs. 200 billion per year revenue Until FY26.
conclusion
Polycab’s Ltd track record speaks for itself. Strong market share, consistent growth, and focus on quality have established the company as a leader in the FMEG industry. Our ability to adapt to changing market trends, including increased demand for B2C products and a focus on sustainability, positions us well for continued success.
Polycab Ltd has the potential to further consolidate its position. Continued investment in research and development, brand building and strategic expansion into new markets allows us to grow to greater heights. As India’s infrastructure development continues to surge, Polycab Ltd is well-positioned to become a key player in driving the country’s growth. Do you think your company may fail in the future? Please let us know in the comments below.
Written by Pavunkumar VM
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