Polycab India to share Q3 results on Jan 18; IT raids to hit sales; key expectations

Polycab India Ltd, whose shares are under pressure following income tax searches last month,  is all set to announce its December quarter results on Thursday, January 18. The cables and wires maker is expected to report up to 22 per cent rise in year-on-year (YoY) profit on 12-20 per cent jump in sales. Margin is seen falling sequentially but is likely to be higher than the year-ago quarter’s. Analysts expect Polycab India to continue to garner market share due to its aggressive marketing, a wide product portfolio and quick availability of products. They see some impact of December IT raids on sales.

Axis Securities expects Polycab India to report a strong growth in the B2B segment as well as exports. A stability in raw material prices would improve profitability, it said as it anticipated 15.2 per cent YoY rise in profit at Rs 416 crore compared with Rs 361 crore YoY. The brokerage sees sales climbing 16.5 per cent YoY to Rs 4,330 crore from Rs 3,715 crore YoY. Ebitda is seen jumping 19.5 per cent to Rs 602, with Ebitda margin at 13.9 per cent.

Nirmal Bang sees profit for Polycab India rising 22.6 per cent YoY to Rs 438.50 crore. It sees sales at Rs 4,458 crore, up 20 per cent YoY. Phillip Capital expects profit to jump 18.1 per cent and revenue 17.9 per cent YoY. It forecast strong growth in B2B, exports and south and east markets in W&C.

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"We expect growth of 17 per cent in Q3 in W&C (we expect last 10 days of quarter sales impacted mainly due to IT raids). FMEG impacted because of fans. Control on costs helped margins," it said.

Polycab India shares are down 24 per cent in the last one month. On Tuesday, the stock was up 3.3 per cent at Rs 4,338.25. Foreign brokerage Jefferies has a target of Rs 7,000 on the stock.

Prabhudas Lilladher said it expects sales to grow 12 per cent YoY with Wires & Cables growing 11.1 per cent, a lower growth due to last 10 days of disruption in business and slowdown in wire business.  "FMEG expected growth of 4 per cent YoY impacted due to seasonally weak quarter for fan segment. We expect margins to contract by 20 bps YoY with loss of sales. PAT to grow by 4.7 per cent YoY," Prabhudas Lilladher said.

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