The electrical goods maker saw a 24 percent growth in Q3 revenues.
Electrical goods firm Polycab India posted a 14.4 percent year-on-year (YoY) rise in its December quarter (Q3) consolidated net profit at Rs 221.4 crore on lower finance costs and less tax outgo.
The revenue grew 24 percent YoY to Rs. 2,507.3 crore in Q3 driven by a healthy growth across business segments.The wires and cables business grew 20 percent YoY to Rs 2,150.2 crore in Q3. The FMEG business saw a YoY growth of 34 percent to Rs 216.6 crore.
The profit after tax (PAT) margin stood at 8.8 percent in Q3FY20, lower YoY by 73bps lower.
In an interaction with Moneycontrol, Gandharv Tongia, deputy Chief Financial Officer, Polycab, said that the PAT margin in Q3FY20 has improved considerably versus the 6.3 percent margin in FY19.
"Overall, the net profit saw an improvement due to reduction in finance costs and tax. There has been a reduction in finance costs because we are sitting on a cash of about Rs 650 crore. Similarly, our effective tax rate came down to 26 percent compared to 35 percent a year ago," he said.
Tongia added that Polycab is executing a large order in Africa where an oil refinery is being set up. The company has supplied Rs 430 crore worth of cables in the nine month period of FY20 for the Africa order. This order could be completed by end of Q1FY21.
"We have also added new customers in developed economies like US, Australia, which has contributed to the topline growth of 21 percent," he added.
For the nine-month (9M) period of April to December 2019, the wires and cables business saw a 17 percent YoY growth to Rs 5,675.9 crore.
Here, Tongia said that while wires business saw a healthy growth, the cables business on the institutional side saw a degrowth. He attributed this dip to the large base and the one-time orders as well as the slowdowing leading to project delays and liquidity crisis.
For 9MFY20, the net profit grew by 53 percent YoY to Rs 550.5 crore. This figure was higher than the FY19 net profit of Rs 550.3 crore.Inder T Jaisinghani, Chairman and Managing Director, Polycab India, said that their topline growth remains strong across segments helped by the pan-India distribution network coupled with exports.
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