POLYCAB

Faces Softer Q4 Amid Global Uncertainty

, which has delivered a standout FY26 performance so far, is bracing for a weaker March quarter (Q4FY26). Supply chain disruptions from the West Asia conflict and copper price volatility are expected to weigh on volumes and margins. While long-term growth drivers remain intact—distribution expansion and diversification into fast-moving electrical goods (FMEG)—near-term earnings visibility is clouded. Performance Highlights - 9MFY26 consolidated revenue: ₹20,020 crore (+30% YoY). - Q3FY26 revenue growth: +46% YoY, led by +54% in wires & cables (88% of segment revenues). - Exports: 6% of 9MFY26 sales, with West Asia contributing 20–22% of export mix. Q4FY26 Challenges - March typically contributes 45–50% of Q4 revenue, but demand has slowed. - JM Financial: Q4 volumes could be flat YoY, with growth relying on 18–20% input cost appreciation. - Copper prices surged +21% QoQ in Q3FY26, contracting EBITDA margin by 112 bps to 12.7% (vs. 15.4% in Q2). - Price hikes taken in Q3 and Q4 to protect realizations, but margins remain under pressure. Medium-Term Outlook - ICICI Securities: Current softness is transitory, likely a timing shift in demand. - Margin recovery expected from Q1FY27, if commodity prices stabilize and price pass-through benefits materialize. - Distribution strength: 4,500+ distributors, 200,000 retail touchpoints, expanding into tier-2/3 cities. - Marketing spends to rise from 1.5% to 3–5% of B2C sales to strengthen brand. - FMEG push (fans, switches, lighting) leverages existing network, diversifying revenue streams. Valuation & Stock View - Shares down 17% since 27 Feb 2026 post West Asia conflict. - Trades at 29x FY28E EPS (Bloomberg). - Near-term: Stock likely range-bound until clearer evidence of volume recovery and margin expansion. - Long-term: Distribution strength, FMEG diversification, and copper price stability remain key drivers.