Polycab shares rally 6% on strong operational performance in Q2

Shares of Polycab India rallied 6 per cent to Rs 935 on the BSE on Monday in an otherwise subdued market after the company reported strong operational performance for the quarter ended September 2020 (Q2FY21).

The management remains optimistic about robust economic potential over mid to long term, government initiatives and reviving consumer sentiment should support demand in months to come.

In Q2FY21, the company’s Ebitda (earnings before interest, taxes, depreciation, and amortization) grew 16 per cent year on year (YoY) at Rs 312 crore, margin improved 272 basis points to 14.76 per cent over the previous year quarter.

Revenue declined 6 per cent YoY to Rs 2,114 crore as against 50 per cent YoY decline seen in Q1. Improving overall business environment with staggered unlocking led to better performance sequentially, the company said.

The fast moving electric goods (FMEG) business grew 25 per cent YoY to Rs 244 crore in Q2FY21 from Rs 196 crore in Q2FY20. Growth was resilient across most categories and regions. Profitability in Q2 improved sharply despite rising input costs on account of calibrated pricing actions, premiumisation and working capital interventions, it said.

The company further said overall demand trends are encouraging and many of consumer facing businesses have started seeing growth compared to last year. At the same time, the company has tightened belts to improve profitability without bargaining on long term brand development and innovation initiatives.

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