Polycab Profit Rises 43% as Record Revenue Meets Margin Pressure
Polycab India posted its highest-ever quarterly revenue, but profitability was tempered by rising input costs and a high base from the previous year.
Polycab India's Q2 FY27 revenue surged 53% to ₹9,899 crore, driven by strong wires & cables and FMEG demand. Profit grew 43% to ₹990 crore, though net margins contracted due to higher material costs.
Polycab India’s latest quarter shows the electrical goods giant riding a powerful wave of domestic demand, but also navigating the undercurrent of cost inflation. The company delivered its highest-ever quarterly revenue, yet the profit growth could not keep pace, revealing a margin squeeze that has become the quarter's defining tension.
Revenue for Q2 FY27 soared to ₹9,899 crore, a 53% jump from a year ago and a 21% rise from the previous quarter. Profit followed, climbing 43% year-on-year to ₹990 crore. However, the net profit margin contracted by 70 basis points to 10%, as the cost of materials rose faster than sales.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 9,898.9YoY +53% | 8,209.7 | 6,477.2 |
| Profit (₹ Cr) | 990.0YoY +43% | 796.7 | 693.0 |
| Net Profit Margin (%) | 10.0YoY -6.5% | 9.7 | 10.7 |
The Growth Engine: Wires, Cables, and a Breakout FMEG
Growth was broad-based. According to reports from ETManufacturing and Investing.com, the core wires and cables segment grew 47% year-on-year, with domestic revenue up 50%. The fast-moving electrical goods (FMEG) division was the star, more than doubling its revenue with 124% growth and, for the first time, achieving a double-digit EBIT margin of 10.1%.
Why Margins Narrowed on Record Sales
The headline profit growth masks a profitability pinch. A report from SauEnergy notes that material costs as a share of revenue rose to 76.4% from 72.9% a year earlier. This gross margin pressure, driven by commodity prices, was the primary reason the net profit margin fell year-on-year. The squeeze was milder than some feared, however, with margins improving sequentially from Q1.
The Outlook: Demand Intact, Competition Looms
Management, cited in an Investing.com transcript, sees domestic demand remaining encouraging, supported by infrastructure spending and improving private investment. The company maintains a robust order book of ₹9,000-10,000 crore for its EPC segment. Yet, risks are rising. Analysts point to new competitive entrants like UltraTech Cement's Ultravolt, which could pressure the residential wires market over time.
Key Points
- Revenue hit a record ₹9,899 crore, up 53% YoY, led by 47% growth in wires & cables and a 124% surge in FMEG sales.
- Profit grew 43% YoY to ₹990 crore, but net profit margin contracted 70 basis points due to higher input costs.
- The FMEG segment achieved a milestone, crossing a 10% EBIT margin for the first time, signaling improved scale.
- Management remains confident in domestic demand drivers but faces emerging competition and commodity cost volatility.
Hexa Perspective
Polycab’s quarter underscores a business firing on all cylinders in a supportive macro environment. The margin contraction, while expected in a commodity-linked business, was contained enough to allow for strong absolute profit growth and sequential improvement. The real test for the coming quarters will be sustaining this balance. The company must manage input costs while its FMEB division scales to offset any pricing pressure in its core wires business from new competition. The current valuation, at a discount to the industry average, appears to price in these crosswinds, leaving the stock's trajectory tied to execution on these margins.
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