Polycab India Share price and Fundamental Analysis

Company History

Polycab India Limited was incorporated as a Private Limited Company with the name Polycab Wires Private Limited' on January 10, 1996. In 1998, Polycab Industries' was subsequently converted into a Private Limited Company as Polycab Industries Private Limited'. Polycab Industries Private Limited got amalgamated with the Company during the year 2011.

The Company is the largest manufacturer of Wires and Cables in India and fast growing player in the Fast Moving Electrical Goods (FMEG) space. The Company operate into the business of Engineering, Procurement and Construction (EPC) projects. It owns nearly 25 manufacturing plants, located across the States of Gujarat, Maharashtra, Uttarakhand, Tamil Nadu and U.T. Daman.

On June 30, 2000, the Company became a deemed Public Limited Company and the word Private' was struck off from the name of the Company with effect from June 30, 2000. Thereafter, the Company was converted into a Private Limited Company and the word Private' was added in the name of the Company with effect from June 15, 2001. Later, the Company was converted into a public limited company, the word private' was struck off from the name of the Company and the name was changed to Polycab Wires Limited'. Thereafter, the name of the Company was changed from Polycab Wires Limited' to Polycab India Limited' on October 13, 2018 to reflect the overall line of business in which the Company is engaged such as cables and wires, FMEG, EPC, etc.,

The Company is engaged in the business of manufacturing and selling wires and cables and fast moving electrical goods ('FMEG') under the 'POLYCAB' brand. The company is the largest manufacturer in the wires and cables industry in India, in terms of revenue from the wires and cables segment and provide one of the most extensive range of wires and cables in India. Apart from wires and cables, manufacture and sell FMEG such as electric fans, LED lighting and luminaries, switches and switchgears, solar products and conduits and accessories.

Polycab India manufactures and sells a diverse range of wires and cables and its key products in the wires and cables segment are power cables, control cables, instrumentation cables, solar cables, building wires, flexible cables, flexible/single multi core cables, communication cables and others including welding cables, submersible flat and round cables, rubber cables, overhead conductors, railway signaling cables, specialty cables and green wires. In 2009, the company diversified into the engineering, procurement and construction ('EPC') business, which includes the design, engineering, supply, execution and commissioning of power distribution and rural electrification projects. In 2014, the company diversified into the FMEG segment and its key FMEG are electric fans, LED lighting and luminaires, switches and switchgears, solar products and conduits and accessories.

The Company has 24 manufacturing facilities, including its two joint ventures with Techno Electromech Pvt Ltd. ('Techno') and Trafigura Pte Ltd ('Trafigura'), located across the states of Gujarat, Maharashtra and Uttarakhand and the union territory of Daman and Diu. Four of these 24 manufacturing facilities are for the production of FMEG, including a 50:50 joint venture with Techno, a Gujarat-based manufacturer of LED products. In 2016, the company entered into a 50:50 joint venture with Trafigura, a commodity trading company, to set up a manufacturing facility in Waghodia, India to produce copper wire rods (the 'Ryker Plant'). The Company expects the Ryker Plant to commence commercial operations by the end of Fiscal 2019, with an estimated annual capacity of 225,000 MT of copper wire rods once it is fully operational. The Ryker Plant will strengthen the backward integration of manufacturing process as the company expects that it will meet a substantial part of their demand for copper wire rods for the manufacturing of its wires and cables and FMEG. The Company strives to deliver customized and innovative products with speed and quality service. Most of their manufacturing facilities are accredited with quality management system certificates for compliance with ISO 9001, ISO 14001 and OHSAS 18001 requirements. The Company's central quality and test laboratory in Halol is accredited by NABL and its central test laboratory, also located in Halol, for all flexible wires and cables is approved by Underwriters Laboratories ('UL'). Certain of their products are also certified to be compliant with various national and international quality standards including Bureau of Indian Standards ('BIS'), British Approvals Service for Cables (BASEC), UL and international electrotechnical commission ('IEC').

The Company has an established supply chain comprising its network of authorized dealers, distributors and retailers. This network supplies its products across India. The Company works closely with major power utilities, oil and gas, IT parks, metro rail, infrastructure, metal and non-metal, cement and EPC companies that operate in India and abroad. The Customers include institutional clients such as L&T Construction and government clients such as Konkan Railway Corporation Ltd.

During FY 2020, the Company acquired 50% stake in Ryker plant for copper rod manufacturing from Trafigura, making Ryker a wholly-owned subsidiary of Polycab. It entered into a 50:50 joint venture with commodity major Trafigura for setting up a new unit at the Waghodia facility, Gujarat, for production of copper wire rods. This plant commenced production in Q1 FY20 with an annual capacity of 2,25,000 tonnes. In the switches category, the Company introduced new coloured plate range, infrared sensor and touch feel products and switches in both economical and premium category named Evina and Levana Plus. It invested in manufacturing capabilities and branding activities.

As on March 31, 2020, the Company had 5 subsidiaries.

During year 2021, the Company developed an innovative special coating for fans with help from their technology consultants and launched India's first 4-in-1 protection fan (anti-ageing, anti-bacteria, anti-dust, anti-rust) - Polycab Purocoat fans. It launched super premium Hohm product range, which are IoT-enabled and aligned towards the preference of younger generation. It launched all-new range of premium, high water heaters. It launched various products such as bulbs, 36W battens, frameless panels, chip on board (COB), strip lights, streetlights, flood lights amongst others. It launched a new portfolio of portable accessories including multi-plugs, adapters, power strips with USB ports, flex box and others. On June 18, 2021, the Company acquired 100% stake in Bengaluru-based Silvan Innovation Labs Private Limited at a consideration of Rs. 102 million to augment the Company's Internet of Things (IoT) based home automation and office automation solutions. In November 2021, it divested 100% stake in Ryker Base Pvt. Ltd. for an enterprise value of about Rs. 3,230 million.

In FY22, Company launched over 30 different models of fans and appliances across categories i.e. Premium, Economy, BLDC, etc. and various new models of lights and luminaries. It launched 'Etira', a new brand from the house of Polycab. It introduced many new models in WH business along with bringing energy saving models and parallely forayed into small appliances through Room Heaters. It forayed into Central Control and Management System (CCMS) for connected lighting in streetlights and have also introduced hybrid technology in Driver on Board (DOB) lamps to bring about technological and cost advantage. It launched a unique Hybrid Technology LED Bulb, which results in lower cost and better quality, thereby reducing consumer rejections.

During the year 2023, the Company launched ~40 new models of star-rated ceiling fans in the designer, celebration, and tech series; it launched the second series of MCB with 6kA for the domestic and international market; launched various new cables, such as telecom hybrid cables, lead sheath offshore cables, submarine medium voltage cables; launched a TV commercial for Green Wire during a sporting event, conducted product education drives, webinars, and meets for influencers, builders, and trade partners, launched its 3-in-1 LED portfolio, It installed switch manufacturing plant with an installed capacity of 12 million units.