Published On:May 15 2024
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"Polycab India to Increase Capex by 30% to ₹1,100 Crore"

Polycab India, one of the largest manufacturers of cables and wires in the country, is gearing up for a significant expansion with a proposed 30% ramp-up in capital expenditure (capex), aiming to reach around ₹1,100 crore, up from the existing ₹800–850 crore. This move is driven by the anticipation of sustained demand, bolstered by the government's continuous focus on infrastructure development and an uptick in private capital investment.

The capex will be allocated towards both greenfield and brownfield projects at Hallol in Gujarat, according to Gandharv Tongia, the Chief Financial Officer of Polycab. Tongia expressed confidence in achieving industry-leading growth by focusing on improving the top-line performance.

In the fiscal year 2024, the company witnessed a significant 29% year-on-year increase in revenue, reaching ₹18,000 crore. The majority of this revenue, approximately 92%, was generated from domestic operations, with the remaining coming from international businesses.

The upcoming ₹700 crore extra-high voltage (EHV) plant at Hallol is expected to become operational by fiscal year 2026, with revenue benefits expected to accrue from fiscal year 2027 onwards. Other expansion projects, including a dedicated facility for exports and a special cable facility, are anticipated to come online over the next 12-18 months.

Tongia highlighted that the resurgence of private capital in sectors such as steel, cement, and real estate, coupled with the government's infrastructure push and the growth in rural markets, is expected to sustain the demand momentum in the cables and wire segment.

The company is also considering a recalibration of revenue guidance under 'Project Leap', which initially aimed for ₹20,000 crore in revenue by fiscal year 2026. With revenues already reaching ₹18,000 crore in fiscal year 2024, Tongia indicated the possibility of upward adjustments in these projections.

However, despite annualized revenues ranging between ₹1,200–1,300 crore, Polycab's Fast-Moving Electrical Goods (FMEG) vertical, which includes fans, lights, switches, and switch-gear, continues to operate at a loss, with an EBIT loss of over ₹90 crore. Tongia expressed optimism about turning this vertical profitable within the next three to four quarters, citing the implementation of new strategies and the appointment of new teams.


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