Polycab India Concall was today at 4 PM.
Here are the key highlights of the conference call π
@drprashantmish6 @nid_rockz @Prakashplutus @karansharma_09 @Rishikesh_ADX
Here are the key highlights of the conference call π
@drprashantmish6 @nid_rockz @Prakashplutus @karansharma_09 @Rishikesh_ADX
Updates:
β’ Key focus will be now brand recognition.
β’ Now co. has low concern of labour.
β’ Tier 1 and Tier 2 see health double digit growth.
β’ Sequential basis saw good recovery after COVID.
β’ Quarter 2 had saw New infra investments.
β’ Key focus will be now brand recognition.
β’ Now co. has low concern of labour.
β’ Tier 1 and Tier 2 see health double digit growth.
β’ Sequential basis saw good recovery after COVID.
β’ Quarter 2 had saw New infra investments.
β’ Metro, Power, Infra are also starting working fast, hence kicked on new quarter with positive note.
β’ B2B wire and cable saw on recovery
β’ Company has be continue participating in TV Media.
β’ Finance cost lowered by 14%
β’ Other income was mainly due to forex gain
β’ B2B wire and cable saw on recovery
β’ Company has be continue participating in TV Media.
β’ Finance cost lowered by 14%
β’ Other income was mainly due to forex gain
Cost optimization: Project Udaan Working well. Success of the project is the focus for the maintaining cost.
β’ Wires and cable decent growth. Company is very optimistic with this project.
β’ Distribution channel performed better
β’ Wires and cable decent growth. Company is very optimistic with this project.
β’ Distribution channel performed better
β’ Domestic side, distribution worked well, hence need to pass some margins to distributor as well.
β’ Receive good order from several MNC. Enrolled to CIF country.
β’ Pump sales double QoQ.
β’ FMEG segment has done well with better contributions to profitability.
β’ Receive good order from several MNC. Enrolled to CIF country.
β’ Pump sales double QoQ.
β’ FMEG segment has done well with better contributions to profitability.
IPL Cost: This will lead to high advertisement cost foro the coming quarter.
β’ 1/5 of the cost in Sep Quarter. 4/5 cost will be incurred in the next quarter.
β’ Sponsored IPL for the 5 consecutive cost.
β’ Company is planning to launch the IOT for operation as well
β’ 1/5 of the cost in Sep Quarter. 4/5 cost will be incurred in the next quarter.
β’ Sponsored IPL for the 5 consecutive cost.
β’ Company is planning to launch the IOT for operation as well
Working Capital: Receivable come down (robust cash collection).
Inventory remain high due to (working towards inventory optimization)- Project Sankalp (for inventory optimization)- is on good shape now.
Raw material- Increasing contact which helps in souring timing raw material.
Inventory remain high due to (working towards inventory optimization)- Project Sankalp (for inventory optimization)- is on good shape now.
Raw material- Increasing contact which helps in souring timing raw material.
Goods in transit is the issue of the business, arise due to COVID which will be solved in the coming quarter.
β’ Project Bandhan saw good growth (47000 retailer 1,540,000 electrician)
β’ Project Bandhan saw good growth (47000 retailer 1,540,000 electrician)
Margins Sustainability:
β’ 11-13% of the EBIDTA margins would be sustainable for the long term.
β’ In cable and wire B2C is profitable which has shown double digit growth than B2B which degrew.
Project Udaan will be beneficial for the cost saving model and maintaining margin
β’ 11-13% of the EBIDTA margins would be sustainable for the long term.
β’ In cable and wire B2C is profitable which has shown double digit growth than B2B which degrew.
Project Udaan will be beneficial for the cost saving model and maintaining margin
FMEG Segment: FMEG is in healthy double digit growth. Institutional business is challenge (Q1 degrew by 70% and in Q2 it was 30-40% de-growth).
β’ B2B model is in double digit growth and B2C is showing good single digit growth.
β’ FMEG segment is expected to deliver good growth
β’ B2B model is in double digit growth and B2C is showing good single digit growth.
β’ FMEG segment is expected to deliver good growth
FMEG: 5 year back launched the segment.
β’ Launched all the products in 12-18 months
β’ Main focus on Large Business (like fan, cooler) and main focus here will be to make good margin
β’ While commapny is also planning to launch premium products like focus on premium fans
Cont.
β’ Launched all the products in 12-18 months
β’ Main focus on Large Business (like fan, cooler) and main focus here will be to make good margin
β’ While commapny is also planning to launch premium products like focus on premium fans
Cont.
FMEG conti.
β’ Other business- main focus will be good Margins product only.
β’ Next generation product: This will be premium category. This segment will lead to increasing the profitability. However the quantity will be low.
Helps in FMEG margin
β’ Other business- main focus will be good Margins product only.
β’ Next generation product: This will be premium category. This segment will lead to increasing the profitability. However the quantity will be low.
Helps in FMEG margin
Working Capital of FMEG:
β’ Inventory levels has seen reduction.
β’ Receivable has been improvement. Helped in performance of business. Channel financing is focus to maintain receivable.
β’ There are common dealers and distribution.
β’ Inventory levels has seen reduction.
β’ Receivable has been improvement. Helped in performance of business. Channel financing is focus to maintain receivable.
β’ There are common dealers and distribution.
Export achievement: 10% of export from this quarter which mgmt said in last quarter is now done in this quarter.
β’ USD $ 10million of order will help continuing export, which will be good in achieving the export target. This will be served till FY 2021
β’ USD $ 10million of order will help continuing export, which will be good in achieving the export target. This will be served till FY 2021
β’ 80-75% business is last quarter came from dealers.
β’ Near growth: No considerable demand growth in Q2. There is good government support. H2 is expected to be better than first half.
β’ Co. has bought out balance 50% stake in Ryker for copper rod manufacturing from Trafigura
β’ Near growth: No considerable demand growth in Q2. There is good government support. H2 is expected to be better than first half.
β’ Co. has bought out balance 50% stake in Ryker for copper rod manufacturing from Trafigura
Channel financing: Coming quarter company is focusing to increase channel financing. It wont be 100%, however any good percentage would reduce the receivable of the business, this would help the receivable of business.
Advertisement: Necessary to continue the expense to create brand. 6 year back it was only 10cr of cost. And with continue advertisement company has created good brand in the eyes of B2C.
B2B advertisement would be the next focus of the company to
B2B advertisement would be the next focus of the company to
Unorganized share:
β’ Revival in the unorganized sector
β’ However overall share decreased compared YoY
β’ Pvt. CAPEX in organised is not increase in past 6 months. β’ There is slow growth on CAPEX in cable
β’ Large scale producer has increasing their business on B2C business
β’ Revival in the unorganized sector
β’ However overall share decreased compared YoY
β’ Pvt. CAPEX in organised is not increase in past 6 months. β’ There is slow growth on CAPEX in cable
β’ Large scale producer has increasing their business on B2C business
Conclusion:
β’ Segment is seeing good revival
β’ Government spending in infrastructure can be helpful
β’ Project Udaan can helpful for cost optimization
β’ FMEG segment segment is showing good revival
β’ Co. is trying to improve WC
β’ Mgmt expected to maintain EBIT of 11-13%
β’ Segment is seeing good revival
β’ Government spending in infrastructure can be helpful
β’ Project Udaan can helpful for cost optimization
β’ FMEG segment segment is showing good revival
β’ Co. is trying to improve WC
β’ Mgmt expected to maintain EBIT of 11-13%
β’ β’ β’
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