Expect exports to be 10% of our topline over the next 3-5 years: Polycab CFO

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26 Aug, 2025 12:21

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Electrical goods company Polycab that saw a 13 percent year-on-year decline in June quarter (Q1) net profit at Rs 117.5 crore is looking to expand the share of exports in its revenue.

In an interaction with Moneycontrol, Gandharv Tongia, Chief Financial Officer of Polycab said that in the next three to five years, the company wants exports to be 10 percent of the top-line.

For Q1FY21, the revenue from operations stood at Rs 976.6 crore, seeing a 50 percent YoY decline due to the Coronavirus-led lockdown. Here, export contribution to top-line was almost 11 percent in Q1 compared to 2 percent in Q1FY20 but was primarily driven by Dangote Project in Nigeria. Export business roughly contributed Rs 100 crore to the top-line of the company.

“We want export contribution of 10 percent and not through Dangote which was a one-off large project that we won. For Polycab, the idea is that 10 percent of top-line via exports should be through diversified and sustainable means and that is possible if we get into distribution,” he added.

Polycab has set up subsidiaries in United States and Australia. Tongia added that the company has identified around 10 geographies in the export business so far.

Business prospects

Tongia said that the first quarter was a washout due to the lockdown imposed in April and May. But he added that things have started improving from June onwards.

“In terms of sales, the first six weeks of FY21 were a washout due to the lockdown. But May sales was better than April, and June was better than May. July is looking better than last year July. This shows that the situation has improved for the company. There is an element of pent-up demand for sure especially in FMEG space,” he added.

In the sales, Tongia said that there has been an increase in the business-to-customer (B2C) segment share which now constitutes 43 percent of total sales. It was 35 percent earlier.

With respect to the fast-moving electrical goods (FMEG) space, Tongia said that there was an adverse leverage in the profitability but topline impact was due to the lockdown. Fan is seasonable business and April/May there was no traction.

FMEG total income saw a 43 percent YoY decline to Rs 137.8 crore in Q1FY21. But FMEG contribution to overall sales increased 177 basis points YoY to 14 percent in the June quarter.

When it comes to margins, PAT margin stood at 12 percent, seeing a YoY growth of 510 basis points. Tongia explained that this was due to one-off items.

“There was a favourable tax order on income tax and so Rs 84 crore was credited. Further, there was Rs 16 crore interest on the income tax refund that has been credited into other income in Q1. Also, we increased our stake in a company Ryker which is now a wholly owned subsidiary. Here, there is a Rs 9 crore gain because as per IFRS rules we have to derecognize equity interest we had in the company,” he said.

As far as the cash position is concerned, Polycab is net cash positive. At the end of Q1, the net cash stood at Rs 205.7 crore. Tongia added that the company also has adequate liquidity.

“As soon as the lockdown was announced in March, we took steps to ensure that we have adequate liquidity and cost optimization was done. On credit facilities, we have Rs 4,000 crore of lines available and hardly anything has been utilized,” he added.

Going forward, Tongia said that the September quarter will be better (Q2) than Q1 and also that H2 will be better than the first half of the financial year.

Polycab has now engaged a large strategy firm to look into the costs incurred by the company and suggest ways how these expenses can be optimized.

“This strategy firm will do a cost optimization programme for us so that we can reduce cost on a sustainable basis,” he said.

Polycab was listed on the stock exchanges in April 2019. Apart from FMEG, the company is a large player in the wires and cables business.