Polycab India Q2 FY27 Results (NSE: POLYCAB)
Signal: Margin pressure
The read
The growth engine accelerated, but the margin trajectory remains the key watchpoint: revenue rose 52.8% YoY to ₹98,989.01 million and FMEG segment revenue more than doubled, yet gross margin contracted 353bps to 23.6% and operating margin fell about 139bps YoY, extending the second consecutive quarter of YoY margin contraction after Q1FY27.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹9,898.9 Cr | +52.8% | +20.6% |
| EBIT | ₹1,311.46 Cr | +28.5% | |
| Net profit | ₹990 Cr | +42.9% | |
| EPS | ₹64.87 | +42.4% | |
| EBIT margin | 14.4% |
P&L walk
Revenue accelerated to ₹98,989.01 million, +52.8% YoY and +20.6% QoQ, led by Wires and Cables and a FMEG rebound; gross margin compressed to 23.6% from 27.1% as material costs rose 60.2% YoY, while PAT grew 42.9% to ₹9,899.97 million.
Segments
Wires and Cables remained the earnings anchor with ₹83,768.41 million revenue and ₹11,887.42 million segment result, while FMEG was the fastest-growing unit at +119.6% revenue and ₹1,006.04 million result versus ₹21.95 million a year earlier; EPC revenue rose 53.4% but segment result declined 39.2% to ₹443.94 million.
Key positives
- Revenue rose 52.8% YoY to ₹98,989.01 million, with FMEG revenue up 119.6% to ₹9,931.13 million and Wires and Cables revenue up 47.2% to ₹83,768.41 million.
- FMEG segment result improved to ₹1,006.04 million from ₹21.95 million, showing a material earnings inflection in the consumer electricals business.
- Non-material expenses increased 27.0% YoY versus 52.8% revenue growth, while cash flow from operations rose 37.0% YoY to ₹22,904.30 million.
Key concerns
- Gross margin compressed 353bps YoY to 23.6% as material cost rose 60.2% to ₹75,623.47 million, faster than the 52.8% revenue increase, indicating cost absorption despite strong growth.
- EPC segment result fell 39.2% YoY to ₹443.94 million even as EPC revenue rose 53.4% to ₹6,170.81 million, implying significant project-margin pressure.
- Finance costs increased 93.4% YoY to ₹936.04 million, outpacing revenue growth and reducing conversion of operating growth into PAT.
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