Subscribe for real-time financial insights on Trade Target’s WhatsApp Channels
Polycab India Evolution Over the Years
Polycab share has risen as a symbol of innovation, dependability, and excellence in the electrical industry. Behind this success stands Thakurdas Jaisinghani, the visionary who laid the foundation for a business that reshaped India’s electrical landscape. It all began in 1964 in Mumbai, the city of dreams with Sind Electric Stores offering a wide range of electrical products, including fans, lights, switches and wires. Thanks to the relentless vision, hard work and dedication of the Jaisinghani family, this humble start has transformed into a publicly traded powerhouse.
As time passed Thakurda’s four sons, Girdhari, Inder, Ajay and Ramesh took over the leadership of the family business. They officially established Thakur Industrie’s under the Indian Partnership Act of 1932, laying the foundation for their journey toward becoming an industry giant.
In 1975, they achieved a milestone by securing a lease agreement with MIDC (Maharashtra Industrial Development Corporation) for land in Mumbai’s bustling Andheri area. Here, they built a factory dedicated to producing cables and wires to meet the growing demand for electrical products.
Then, in 1983, a new era began with the inception of Polycab Industrie’s, founded by Girdhari T. Jaisinghani, Inder T. Jaisinghani, Ajay T. Jaisinghani and Ramesh T. Jaisinghani. This venture aimed to revolutionize the industry by manufacturing PVC insulated wires and cables along with copper and aluminum products, including bare copper wire.
In 1996, ‘Polycab Wires Private Limited’ was established under the Companies Act of 1956, marking a pivotal moment that expanded their reach and cemented their position in the electrical industry. Two years later, in 1998, Polycab Industries Private Limited further solidified its role as a prominent player in the electrical sector. This shift to a private limited entity underscored their commitment to delivering top quality electrical solutions across India.
The company’s growth continued strongly,and in 2018, it reached a major milestone by becoming a publicly traded company. Alongside this transformation came a name change from Polycab Industries to Polycab India Limited.
Business Overview of Polycab Share
Polycab India is a major player in the electrical industry holding a substantial market share of over 24% for wires, cables, and fast-moving electrical goods (FMEG) sold under the POLYCAB brand.
Beyond wires and cables, they also manufacture and sell FMEG products such as electric fans, LED lighting, luminaires, switches, switchgear, solar products and conduits and accessories. Their operational footprint is impressive, featuring 25 manufacturing facilities, a global export presence in 70 countries, a network of 4,300 authorized distributors with continuous expansion, and a vast network of 205,000 retailers connecting them to consumers. Furthermore, they extend their reach globally touching lives in over 40 countries.
Polycab’s Product Mix and Sales Breakdown for FY1 2024
No Data Found
In the current quarter of FY1 2024, Polycab primarily focuses on wires and cables making up 89% of their product mix. Fast moving electrical goods (FMEG) constitute 8%, and the remaining 3% comprises other products.
No Data Found
In terms of sales, the majority, which is 91%, comes from their domestic business,showcasing Polycab’s strong presence in the local market. International business contributes 9% to their total sales, indicating their expanding global presence.
Polycab Share Returns Over Various Periods(%)
No Data Found
Looking at the company’s price performance, it’s clear that Polycab India has provided substantial returns to its investors over different time frames. For instance, the one-year return is an impressive 109.72%, and the three-year return is a remarkable 490.24%. These numbers highlight Polycab India’s consistent history of delivering substantial value and growth to its investors.
Polycab Share Key Financial Metrics
| Company Essentials | Value |
|---|---|
Market Cap | ₹ 78,119.22 Cr. |
Face Value | ₹ 10 |
Current Price | ₹ 5,208 |
52 Week High | ₹ 5,166 |
52 Week Low | ₹ 2,451.10 |
Industry P/E | 56 |
Stock P/E | 53.63 |
P/B | 11.19 |
Div. Yield | 0.38% |
Debt | ₹ 82.13 Cr. |
EPS (TTM) | ₹ 97.12 |
Polycab Share Cash Flow (value in Cr.)
The table below presents Polycab India Limited’s cash flow for the past five years, offering insights into the fluctuations in its financial performance. These fluctuations reflect the company’s ability to manage its operations, investments, and financial resources, leading to both prosperous and challenging periods in its cash flow history. Notably, in recent years, Polycab India has demonstrated resilience and adaptability, evident in its positive net cash flow, indicating its ability to handle financial challenges effectively.
| Particulars (Consolidated) | Mar 2020 (Cr.) | Mar 2021 (Cr.) | Mar 2022 (Cr.) | Mar 2023 (Cr.) |
|---|---|---|---|---|
Cash from Operating Activity | 244 | 1,252 | 511 | 1,427 |
Cash from Investing Activity | -262 | -1,012 | -426 | -1,202 |
Cash from Financing Activity | 11 | -174 | -200 | -227 |
Net Cash Flow | -6 | 65 | -116 | -2 |
Annual Financial Overview
Sales Growth:The organization has experienced consistent growth in its sales revenue throughout the span of four years. A significant surge in sales was observed between March 2021 and March 2022, followed by another notable increase in the latest year, March 2023. This demonstrates robust revenue expansion for the company. This demonstrates the company’s healthy financial performance and potential for continued success.
Operating Profit Growth: Operating profit has consistently grown over the past four years. There was a gradual uptick in operating profit from March 2020 to March 2022, followed by a more substantial increase in March 2023. This indicates that the company has effectively controlled its operating expenses while boosting sales.
Net Profit Growth: The company’s bottom line, represented by its net profit, has exhibited a consistent growth pattern from March 2020 to March 2023. This demonstrates the company’s success not only in boosting its revenue but also in effectively controlling expenses and attaining greater profitability.
Key Financial Metrics
Sales Growth:
- In the most recent one-year period, the company witnessed a 15% increase in sales, demonstrating a favorable trend in revenue generation.
- This growth, while slightly below the average growth rate of the past three and five years (both at 16%), still indicates robust and expanding sales performance in the short term.
Profit Growth:
- Over the last five years, the company achieved a profit growth rate of 29%, highlighting a significant enhancement in profitability during this timeframe.
- In the past three years, the profit growth rate was slightly lower at 19%, which, although positive, indicated a slowdown compared to the preceding five years. However, in the most recent one-year period, there was a substantial surge in profit growth to 37%, signifying a remarkable increase in profitability compared to the previous three years.
No Data Found
ROE Ratio:
ROE Ratio, or Return on Equity, is like a report card for a company. It tells us how well the company uses the money its shareholders invested. A higher ROE means the company is good at turning shareholders’ money into profits.
- For Polycab, the recent uptick in ROE, transitioning from 20% over a 5-year period to 21% in the most recent year, indicates a slight enhancement in the company’s ability to yield profits for its shareholders in the latest fiscal year.
ROCE Ratio:
ROCE Ratio, which stands for Return on Capital Employed, is a financial measure that tells us how well a company uses its money to make more money. If a company has a high ROCE, it means it’s doing a good job of using its money to make profits. But if the ROCE is low, it could mean the company isn’t using its money very efficiently.
- Looking at Polycab, their ROCE has been going up over the past few years. It went from 25% to 27% over three and five years, and now it's at 28%. This suggests that Polycab is getting better at using its money to make profits, which is a positive sign for the company.
No Data Found
Polycab Share Shareholding Pattern
Polycab India has a well diversified shareholding pattern. The company’s promoters hold the majority of the shares, with a 66% ownership stake, demonstrating their strong dedication to the company’s success. The public holds 15% of the shares, while both (DIIs) Domestic Institutional Investors and (FIIs) Foreign Institutional Investors each have a 10% stake. This balanced ownership structure plays a crucial role in ensuring the company’s stability and performance in the stock market.
No Data Found
Price Analysis
In 2019, Polycab India made a successful debut in the financial market, concluding its initial public offering (IPO) at a 21% premium over the issue price of ₹538. The public offering, which amounted to ₹1,345 crore, garnered significant attention from investors, as it was oversubscribed by an impressive 51.96 times. This strong investor response showed that people had a lot of faith in the company.
Since its listing, Polycab has consistently delivered substantial returns, providing investors with an impressive 700%+ return on their investments. Notably, in just one year, Polycab has generated a remarkable 110% return, and in the span of two years, it has achieved an impressive 133% return. Polycab has undeniably established itself as a prominent wealth creator for its shareholders.
Ploycab Share: Future Growth Opportunities
Polycab India plays a significant role in India’s growth story by producing excellent products. Let’s see how the company can expand in the changing wires and cable market in India.
Current Market Scenario:
The current market situation in India’s wires and cables industry is quite substantial, with a value ranging from ₹68,000 to ₹73,000 crores. What’s even more exciting is the potential for significant growth, with projections indicating it could reach ₹90,000 to ₹95,000 crores by the fiscal year 2026. Here’s why this growth is expected:
1. Rapid Growth in Real Estate: The real estate industry is experiencing a significant surge, resulting in the construction of numerous new buildings and homes. All these developments require extensive electrical wiring and cables for proper functionality.
2. Government Infrastructure Investments: Increased government spending on infrastructure development is creating a strong demand for electrical products, including wires and cables.
3. Renewable Energy Focus: The growing emphasis on renewable energy generation necessitates robust electrical networks, driving up the demand for cables and wires in this sector.
4. Telecom Upgradation: Ongoing upgrades in the telecom network infrastructure require advanced wiring solutions, further contributing to the demand for these products.
Polycab’s Outlook for Expansion
In 2023, Polycab is set to make a substantial investment of approximately ₹600-700 crores in their business, with a particular focus on enhancing their wires & cables and fast-moving electrical goods (FMEG) segments.
Their five-year plan, spanning from FY21 to FY26, outlines the following goals:
- Achieving a revenue target of ₹20,000 crores by FY26.
- Outpacing the market growth rate by 1.5 times in their core segments.
- Doubling the market growth rate in emerging segments.
- Achieving a two-fold market growth rate in the FMEG sector.
- Attaining an EBITDA margin of 10-12% in the FMEG segment.
- Securing more than 10% of their contribution from online sales channels.
Conclusion
Polycab’s journey from its humble beginnings in 1964 to becoming a significant player in the electrical industry demonstrates its impressive growth and adaptability. The company has exhibited strong financial performance, marked by consistent increases in sales, operating profit, and net profit. Furthermore, its positive cash flow indicates effective financial management and adaptability to market changes.
Looking ahead, Polycab share is poised for further expansion. Their strategic investments aim to capitalize on opportunities, generate greater revenue, and meet the growing demand for their products, both domestically and internationally.
Happy investing and thank you for reading!
Disclaimer:
This website content is only for educational purposes, not investment advice. Before making any investment, it’s important to do your own research and be fully informed. Investing in the stock market includes risks, and you should carefully read the Risk Disclosure documents before proceeding. Please remember that past performance doesn’t guarantee future results, and due to market fluctuations, your investment goals may not always be achieved.
