How Polycab’s business has scaled in 2019?
In first half of FY20, Polycab has done well to stand tall against the prevailing economic conditions to achieve a 20 per cent y-o-y revenue growth and 28 per cent y-o-y growth in EBITDA. Going forward, I expect the latest announcement of corporate tax rate cut will take some time to translate into real benefits with demand picking up only by fourth quarter of FY20. This year demand is likely to be driven by infrastructure projects.
Talking about the future, we will continue to work on enhancing and strengthening our leadership position in wires and cables by increasing our geographical penetration and providing customised solutions to customer’s problems. Our strategy is to expand our market share by targeting key growth sectors such as mining, oil and gas, shipping, power, renewables, infrastructure, construction, automotive, telecommunication. We are continuously working on increasing the coverage of channel finance for our distributors and also rationalising our inventory levels to optimally meet our customer requirements and thereby reducing the financing cost.
In 2014, we started on the path of diversification when we entered the FMEG (fast moving electrical goods) segment with Polycab line of fans, lighting, switches, solar products, conduits and accessories. To increase our brand recognition and buzz, we have recently launched new experience centres to help users experience our wide range of products.
We, at Polycab, take pride in being the largest manufacturer of wires and cables in India in terms of revenue from the wires and cables segment. Our extensive range of wires and cables well supported by our FMEG products such as electric fans, LED lighting and luminaires, switches and switchgear, solar products and conduits etc. makes us one of the most sought-after electrical brands in India. Our biggest competitive advantage is our strong and unrivalled distribution network across India comprising of over 3,400 dealers or distributors and more than 1,00,000 retail outlets which enable us to roll out new products more quickly. We also have the largest production capacity of wires and cables with high degree of backward integration for copper rods, aluminium rods, various grades of PVC, rubber, XLPE compounds, GI wire or strip. We have a 50:50 joint venture with Trafigura to set up the Ryker plant for producing copper rods with annual capacity of approximately 2.58 lacs MT. Another key to our success lies in product innovation, quality and availability of materials which is enabled by a strong R&D facility for PVC compounds and polymers and inventory level. Our central quality and test laboratory located at Halol is accredited by NABL. We are also the only company to ensure ready availability of MTS items because we stock a large no. of SKUs of wires and cables compared to any of our competitors.
Polycab at ELECRAMA 2020
ELECRAMA, being the largest electrical exhibition, provides us with an opportunity to exhibit our wide range of products to the target customers and specifiers. The entire electrical industry ecosystem come together to explore the latest innovations, trends and opportunities in the industry. ELECRAMA is visited by the most of the decision makers of power utilities, government organisations, electrical equipment manufacturers, EPC contractors, consultants and other specifiers which make a compelling case of having our presence so as to establish a connect with these people all under one roof. Interaction with these decision makers helps us in understanding the current technology, customer requirements and also the future trends in the industry and therefore, we have been part of ELECRAMA for many of its previous editions.
In the coming edition of ELECRAMA, we will display our diverse range of wires and cables which includes power cables, control cables, instrumentation cables, rubber cables, solar cables, building wires, green wires, flexible cables, communication cables, welding cables, submersible flat and round cables, overhead conductors, and other specialty cables. Further, we will also display our FMEG line of products which include fans, lighting, switches, switchgear, pumps, solar, conduits etc.