Polycab India posted a 53% year-on-year revenue increase for the second quarter of fiscal year 2027, led by strong demand for its wires, cables, and electrical goods. However, operational margins tightened by 140 basis points due to higher raw material costs and global supply chain challenges. Investors are focusing on the firm’s competitive strategy against new market entrants and its upcoming high-voltage expansion plans.
Polycab India reported a 53 percent rise in consolidated revenue for the second quarter of fiscal year 2027, driven by robust demand across its primary business divisions. The company's core wires and cables segment recorded a 50 percent increase in domestic revenue, while the export business also showed improvement with 17 percent growth following a weaker first quarter.
Despite the revenue gains, the company’s operational profitability faced challenges. EBITDA margins narrowed by approximately 140 basis points during the quarter. This pressure on profit margins was largely attributed to rising raw material costs and global shipping difficulties stemming from geopolitical instability in West Asia, which impacted supply chain efficiency. Investors will likely watch whether the company can stabilize these margins as it navigates ongoing commodity price volatility.
The Fast Moving Electrical Goods (FMEG) segment achieved a notable milestone, reporting a record EBIT margin of 10.1 percent. Growth in this division was supported by demand for lighting products and inverters, which benefited from government-backed solar initiatives. This segment's performance highlights the company's efforts to diversify its revenue streams beyond its traditional infrastructure-focused cable business.
Competitive pressure remains a significant factor for the company. The entry of UltraTech into the cables market through its new Ultravolt brand has drawn attention from investors. While Polycab management has signaled an intent to aggressively protect its market share and emphasized the technical entry barriers in the high-voltage cable space, the industry is closely monitoring the possibility of increased pricing competition that could weigh on future profitability.
Financially, the company maintains a stable position with net cash of approximately Rs 4,520 crore, providing the resources needed for expansion and operational adjustments. Looking ahead, the company is preparing for the commissioning of a new extra-high voltage cable plant, which is currently scheduled for fiscal year 2028. With the stock trading at roughly 31 times projected fiscal year 2028 earnings, the next phases of growth will depend on the company's ability to maintain volume growth and effectively manage input cost pressures. The primary monitorables for shareholders will be the sustainability of current demand trends, the impact of new market competition on pricing power, and the successful execution of capital spending projects.