Polycab India Limited — Interim / Quarterly Report 2020

Jan 21, 2020

POLYCAB INDIA LIMITED

(formerly known as Polycab Wires Limited) Polycab House, 771 Mogul Lane, Mahim (W), Mumbai – 400016 CIN: L31300DL1996PLC266483 Tel : +91 22 2432 7070-74 Fax : +91 22 2432 7075 Email:shares@polycab.com Web: www.polycab.com

Date: 21st January 2020

To Department of Corporate Services BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street Mumbai – 400 001

To Listing Department National Stock Exchange of India Limited C-1, G-Block, Bandra-Kurla Complex Bandra (E), Mumbai – 400 051

Scrip Code: 542652 Scrip Symbol: Polycab ISIN:- INE455K01017

Dear Sir / Madam

Sub: Earnings Call Presentation under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

In accordance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed herewith Earnings Call presentation on the financial results of the Company for the quarter and nine months ended 31st December 2019.

Kindly take the same on your record.

Thanking you

Yours Faithfully

For Polycab India Limited

Sai Subramaniam Narayana Company Secretary and Compliance Officer Membership No.: F5221 Address: Polycab House, 771, Mogul Lane Mahim (West), Mumbai - 400 016

Registered Office: E -554 ,Greater Kailash –II, New Delhi-110048 India Tel : 011-29228574

Q3FY20 Earnings Presentation 21 January 2020

1

1

9M & Q3 FY20 Performance

Key Highlights

Revenue Growth		Q3 vs Q3	Q3 vs Q2
Revenue:	21% 9M-o-9M	24% Y-o-Y	12% Q-o-Q
Profitability
PAT:	53%9M-o-9M	14%Y-o-Y	Q-o-Q14%
Returns
ROCE:	260%53bp9M-o-9M	306%612bpY-o-Y-	306%Q-o-Q431bp
Balance sheet
as onNet Cash:	Dec'196.4bn	Dec'18-6.1bn	Sep'183.9bn

Notes: (1) Numbers on consolidated basis (2) Revenue: Revenue from operations (3) PAT: Profit After Tax (4) ROCE (Return on Capital Employed): (Profit before tax plus finance cost) divided by closing value of (non-current borrowings plus current borrowings plus current maturities of non-current borrowings plus total equity including non-controlling interest) (5) Net Cash (Cash + Investments - Debt ) in INR as of period end.

9M FY20: Healthy top line growth and profitability

• Revenue in 9M FY20 grew by 21% YoY led by healthy growth across segments despite tough market conditions.
• EBITDA was up 18% YoY. EBITDA margin at 12.4% was lower YoY but has improved c.50bp vs FY19
• PAT increased by 53% YoY with margin improvement of c.170 bps led by lower finance costs and income tax rates

Notes: (1) Consolidated basis in INR mn (2) Revenue: Revenue from operations (3) EBITDA Margin: EBITDA divided by Revenue (4) EBITDA excludes other Income (5) PAT Margin: Profit after Tax for the period divided by Revenue

Q3 FY20: Resilient sales growth across segments

• Revenue grew 24% y-o-y and 12% q-o-q driven by healthy growth in across segments.
• EBITDA margins declined by 225bps y-o-y but improved 147bps q-o-q driven by improvement in sales mix and better realisation. At 13.5% Q3 margin is higher than Q2FY20 and FY19
• Historically our steady state EBITDA margin in Wires & Cables business, on an annualised basis, has ranged between 11-13%.
• PAT margin at 8.8% declined by c.73 bps y-o-y but improved c.19 bps vs Q2FY20 led by lower finance costs. Q3 PAT margin is higher than FY19 margin

Notes: (1) Consolidated basis in INR mn (2) Revenue: Revenue from operations (3) EBITDA Margin: EBITDA divided by Revenue (4) EBITDA excludes other Income (5) PAT Margin: Profit after Tax for the period divided by Revenue

Wires and Cables: Performance

• Total income growth of 20% y-o-y was led by healthy growth across categories.
• Growth in cables was largely driven by exports which grew strongly on the back of a large order as well increasing traction seen in few developed geographies. Incremental sales from optical fiber cable (OFC) further contributed to growth. Channel sales in Q3 was soft, impacted by ongoing slowdown. Institutional sales in Q3 were impacted partly due to higher base.
• Wires segment witnessed strong double digit growth during the quarter buoyed by healthy demand from non metro cities. Green wires campaign which was launched across national and regional TV channels in Q3 has garnered good response from customers.

Q3 FY20 performance

9M FY20 performance

FMEG: Performance

• Total income growth of 34% YoY was primarily driven by fans and lighting & luminaries.
• Fans business posted good growth across portfolio with improving sales mix. Lighting as well as Luminaires continue to grow at healthy pace despite challenging market conditions. Growth in Switches and Switchgears remain soft.
• Higher ad spends dragged profitability in Q3.
• In 9M, sales grew 46% YoY driven by portfolio augmentation and distribution expansion. Fans and lighting & luminaires continues its healthy momentum across geographies. EBIT grew by 177% YoY with c.122bp higher margin vs 9MFY19 and c.140bp vs FY19

Q3 FY20 performance

9M FY20 performance

Others: Performance

• Other segment which largely comprises of our EPC business witnessed healthy topline growth and margins led by execution of profitable projects

Q3 FY20 performance

9M FY20 performance

• Revenue in 9MFY20 grew by 56% YoY with higher operating profitability

8 Notes: (1) Consolidated basis in INR mn (2) Total income excludes finance income (3) EBIT (Earnings before Interest and Tax): includes other income and excludes finance income

Financial Statements

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Consolidated Profit and Loss Statement

	Quarter Ended					Nine Months Ended
Particulars (INR mn)	Q3FY20	%	Q2FY20	%	Q3FY19	%	9M FY20	%	9M FY19	%
Revenue from Operation		25,073 100.0% 22,419		100.0%	20,248 100.0%		67,006	100.0%		55,219 100.0%
Cost of Goods sold	18,190		72.5% 16,449	73.4%	14,432	71.3%	48,917	73.0%	40,643	73.6%
Contribution (A)	6,883	27.5%	5,970	26.6%	5,816	28.7%	18,089	27.0%	14,577	26.4%
Employee cost	915	3.6%	924	4.1%	866	4.3%	2,759	4.1%	2,358	4.3%
Other Operating Expenses	2,577	10.3%	2,329	10.4%	1,777	8.8%	6,985	10.4%	5,126	9.3%
Total Operating Expenses (B)	3,492	13.9%	3,253	14.5%	2,642	13.0%	9,744	14.5%	7,484	13.6%
Share of profit/(loss) of JVs (Net of tax) (C)	-2	0.0%	-16	-0.1%	19	0.1%	-16	0.0%	-46	-0.1%
EBITDA (A)-( B)+(C)	3,389	13.5%	2,701	12.0%	3,193	15.8%	8,328	12.4%	7,046	12.8%
Other Income	3	0.0%	124	0.6%	238	1.2%	463	0.7%	421	0.8%
Depreciation	407	1.6%	395	1.8%	356	1.8%	1,187	1.8%	1,071	1.9%
Finance Cost	86	0.3%	127	0.6%	172	0.8%	336	0.5%	905	1.6%
PBT	2,900	11.6%	2,303	10.3%	2,904	14.3%	7,268	10.8%	5,491	9.9%
Income Tax	686	2.7%	365	1.6%	967	4.8%	1,764	2.6%	1,890	3.4%
PAT	2,214	8.8%	1,938	8.6%	1,936	9.6%	5,505	8.2%	3,601	6.5%

Consolidated Balance Sheet

Particulars(INRmn)	Dec'19	Dec'18	Sep'19	Particulars(INRmn)	Dec'19	Dec'18	Sep'19
Assets				EquityandLiabilities
NonAssets-current				Shareholder'sFunds
FixedAssets	15947,	14153,	15871,	ShareCapital	1488,	1412,	1486,
Financial/NonAssets-current	2835,	2719,	2595,	ReservesandSurplus	36083,	25779,	33677,
TotalNonAssets-current	18782,	16872,	18467,	TotalShareholder'sFunds	57137,	27191,	35164,
CurrentAssets				MinorityInterest	138	67	112
Inventories	16461,	23055,	18943,	NonLiabilities-current
TradeReceivables	12004,	10699,	11360,	Borrowings	131	938	158
Investments	4036,	-	990	OthersNonLiabilities-current-	907	789	886
CashandBankBalances	3631,	78	4586,	TotalNonLiabilities-current	1039,	1727,	1043,
OthersCurrentAssets-	3049,	3155,	2869,	CurrentLiabilities
TotalCurrentAssets	39180,	36987,	38748,	ShortBorrowings-term	801	4464,	1161,
TotalAssets	57962,	53859,	57214,	TradePayables	12179,	15339,	13230,

OthersCurrentLiabilities-	6235,	5071,	6505,
CurrentTotalLiabilities	19214,	24875,	20895,
TotalEquityandLiabilities	57962,	53859,	57214,

Consolidated Cash Flow Statement

		QuarterEnded		Nine	MonthsEnded
Particulars(INRmn)	Q3FY20	Q2FY20	Q3FY19	9MFY20	9MFY19
NetCashFlowfromOperatingActivities	3043,	1280-,	2216-,	5426,	5217,
from/(usedin)Netcashflowinvestingactivities	3593-,	1399,	1141-,	9567-,	2555-,
from/(usedNetcashflowin)financingactivities	414-	1085-,	2297,	1302,	2668-,
/(Decrease)inequivalentsNetIncreasecashandcash	964-	966-	1060-,	1227-,	6-

Other financial metrics

	Trailingtwelvemonths							Closing
WorkingCapitalindays	Q3FY20	Q2FY20	Q1FY20	FY19		Q3FY20	Q2FY20	Q1FY20	FY19
ReceivableDays	45	45	48	60		47	48	51	61
Inventorydays	106	103	106	103		88	108	110	122
PayableDays	100	103	108	110		96	109	139	148
NetWorkingCapital	51	46	46	53		39	47	22	36

(INRmn)OtherIncome	Q3FY20	Q2FY20	Q3FY19	9MFY20	9MFY19
Interestincome	72	78	21	216	43
Gain/lossRedemptionofinvestmenton	30	61	0	142	0
Fairvalueoffinancial(MTM)assets	105-	1	66	51	60
Exchangedifferences(net)	0	44-	104	00	222
Miscellaneousincome	7	30	47	54	95
Total	3	124	238	463	421

FinanceCost(INRmn)	Q3FY20	Q2FY20	Q3FY19	9MFY20	9MFY19
InterestBorrowingson	9	17	55	53	200
/Sales/InterestPurchaseDiscountingon	33	42	68	130	201
ChargesBank	34	36	10	108	60
Gain/lossForeignExchange	9	31	38	45	443
Total	86	127	172	336	905

13 Notes: Working capital days on TTM basis is calculated using average of balance sheet number and sum of trailing 12 months P&L number. Closing basis uses period close balance sheet number and sum of trailing 12 months P&L number. 13

Shareholding Pattern

Notes: As on December 31st 2019

Enhancing shareholder

Safe Harbour

This Release / Communication, except for the historical information, may contain statements, including the words or phrases such as 'expects, anticipates, intends, will, would, undertakes, aims, estimates, contemplates, seeks to, objective, goal, projects, should' and similar expressions or variations of these expressions or negatives of these terms indicating future performance or results, financial or otherwise, which are forward looking statements. These forward looking statements are based on certain expectations, assumptions, anticipated developments and other factors which are not limited to, risk and uncertainties regarding fluctuations in earnings, market growth, intense competition and the pricing environment in the market, consumption level, ability to maintain and manage key customer relationship and supply chain sources and those factors which may affect our ability to implement business strategies successfully, namely changes in regulatory environments, political instability, change in international copper, aluminum, oil prices and input costs and new or changed priorities of the trade. The Company, therefore, cannot guarantee that the forward-looking statements made herein shall be realized. The Company, based on changes as stated above, may alter, amend, modify or make necessary corrective changes in any manner to any such forward looking statement contained herein or make written or oral forward-looking statements as may be required from time to time based on subsequent developments and events. The Company does not undertake any obligation to update forward looking statements that may be made from time to time by or on behalf of the Company to reflect the events or circumstances after the date hereof.

Thank you

Polycab India Limited

CIN: L31300DL1996PLC266483

Contact us

For investor relations: investor.relations@polycab.com For queries on shares & investor grievance: shares@polycab.com Website: www.polycab.com