Wires and cables manufacturer Polycab India is eyeing ₹2,000 crore of exports by FY26, as it targets greater presence in European Union nations, the US and Australia.
The company has already firmed up a ₹600 crore capex on an annualised basis, for both brownfield and greenfield expansion, as it looks to cater to increased demand from overseas markets.
The company has already firmed up a ₹600 crore capex on an annualised basis, for both brownfield and greenfield expansion, as it looks to cater to increased demand from overseas markets.
According to Gandharv Tongia, Executive Director and CFO, Polycab India, expansion will happen across existing facilities at Gujarat and Daman; including setting up of new manufacturing lines that will cater to new products for which the Polycab is entering into a tie-up with an international player.
Capex plans
Capex plans are to be funded from internal resources.
"Our cash position as on December 31, 2022 is around ₹1,800–1,900 crore. So the ₹600 crore capex, on an annualised basis can be done through our own resources. Moreover, we are also looking at possible acquisitions to shore up our export options," he told businessline.
According to Tongia, the export shore-up plan is a part of the company's target to achieve ₹20,000 crore worth of sales across its two prime verticals, namely cables and wires and fast moving electric goods. And 10 per cent of the consolidated turnover will be coming in from exports.
Net profit up 64% YoY
At present, exports account for 8.6 per cent of the consolidated turnover. For the nine-month-period of FY23 (April - December) exports were around ₹850 crore, up 32 per cent year-on-year.
During the period, Polycab reported a 64 per cent increase in PAT YoY to ₹854 crore; while revenues grew 19 per cent to ₹9,784 crore.
Wires and cables continue to be the prime vertical for the company accounting for 88 per cent of the revenues and over 90 per cent of profits. Revenue from the vertical grew 20 per cent for 9MFY23 to ₹8,602 crore. Domestic distribution driven business grew by 25 per cent YoY on the back of volume growth.
On the other hand, the fast-moving electrical goods business grew 8 per cent YoY to ₹948 crore.
According to Tongia, work on realignment of the distribution channel, brand building, new product development and premiumisation of offerings are "on track" and are expected to drive revenues and margins for the vertical in the coming days.
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