Polycab India Ltd. · NSE:POLYCAB
Polycab India — Q1 FY2020 Earnings Presentation
37 slides from Polycab India's earnings presentation, Jul 26, 2019
Slide 1: Polycab India Limited – Regulation 30 cover letter
POLYCAB INDIA LIMITED (formerly known as Polycab Wires Limited) Polycab House, 771 Mogul Lane, Mahim (W), Mumbai – 400016 CIN No U31300DL1996PLC266483 Tel : +91 22 2432 7070-74 Fax : +91 22 2432 7075 Email: info@polycab.com Web: www.polycab.com Date: 26th July 2019 To To Department of Corporate Serv
Slide 2: Earnings Presentation – Q1 FY 2020
Polycab India Limited Earnings Presentation – Q1 FY 2020 26th July 2019
Slide 3: Disclaimer
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Polycab India Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and sha
Slide 4: Agenda
Agenda Financial Performance Q1 FY20 1 23 3 Financial Statements Company Overview 3 Polycab India Limited
Slide 5: Financial Performance Q1 FY2020
Financial Performance Q1 FY2020
Slide 6: Q1FY20 Key Highlights
Q1FY20 Key Highlights Revenue Growth of 15% y-o-y FMEG Revenues ramp up by 62% y-o-y Robust EBITDA Margins at 13.3%; improved 188 bps y-o-y ROCE at 23.4%; improved 293 bps y-o-y Net Cash increased to Rs 6,676 mn Improved operating cash flow of Rs 3,663 mn Notes: (1) Numbers on consolidated basis (2)
Slide 7: Q1 FY2020 - Surge in EBITDA Margins
Q1 FY2020- Surge in EBITDA Margins Revenue EBITDA EBITDA EBITDA Margin PAT PAT PAT Margin 5.6% 7.0% 24,448 10.8% 13.3% 1,373 1,353 19,330 2,630 11.4% 2,574 75.7% 16,826 33.7% 4.6% 14.9% 1,925 770 Q4 FY19 Q1 FY19 Q1 FY20 Q4 FY19 Q1 FY19 Q1 FY20 Q4 FY19 Q1 FY19 Q1 FY20 denote % y-o-y growth in revenue
Slide 8: Segmental Highlights: Wires & cables report strong EBIT Margins
Segmental Highlights: Wires & cables report strong EBIT Margins Total Income: Wire & Cable EBIT: Wire & Cable 69,295 12.1% 8,351 10.2% 11.5% 20,632 9.7% 15,051 16,156 2,095 1,462 1,862 7.3% 27.3% FY19 Q4 FY19 Q1 FY19 Q1 FY20 FY19 Q4 FY19 Q1 FY19 Q1 FY20 denote % y-o-y growth in Total Income denote %
Slide 9: Segmental Highlights: FMEG - Robust revenue ramp up
Segmental Highlights: FMEG-Robust revenue ramp up FMEG Others 6,443 4,637 Total Income 2,184 2,401 1,909 1,481 1,226 62.1% 518 136.6% FY19 Q4 FY19 Q1 FY19 Q1 FY20 FY19 Q4 FY19 Q1 FY19 Q1 FY20 9.3% 4.3% 1.2% 138 3.7% 198 6.0% 9.7% 75 88 EBIT 131 119 (46) (0) -2.4% FY19 Q4 FY19 Q1 FY19 Q1 FY20 FY19 Q4
Slide 10: Robust balance sheet as at June 2019
Robust balance sheet as at 30 June 2019 Enhancing shareholder value ROE ROCE 16.2% 23.4% ROE up 350 bps y-o-y despite comparatively higher ROCE improved by 293 bps y-o-y despite comparatively shareholders base than March 2019 higher capital base than March 2019 Debt/Equity Net Cash Operating Cash 0.
Slide 11: Financial Statements
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Slide 12: Consolidated Profit and Loss Statement
Consolidated Profit and Loss Statement In Rs Mn Quarter Ended Year Ended Particulars Q1FY20 % Q1FY19 % Q4FY19 % FY19 % FY18 % FY17 Revenue from Operation 79,560 100.0% 67,703 100.0% 54,940 19,330 100.0% 16,826 100.0% 24,448 100.0% (net of excise duty) Cost of Goods sold 14,278 73.9% 12,645 75.2% 19,
Slide 13: Consolidated Balance Sheet
Consolidated Balance Sheet In Rs Mn Particulars Q1FY20 Q1FY19 FY19 FY18 FY17 Assets Non-current Assets Fixed Assets 15,562 13,641 14,686 13,331 12,933 Financial / Non-current Assets 2,536 1,885 2,346 1,891 1,483 Total Non-current Assets 18,097 15,526 17,032 15,222 14,416 Current Assets Inventories 1
Slide 14: Cash Flow Statement: Improved operating cash flow through reduced debt exposure
Cash Flow Statement: Improved operating cash flow through reduced debt exposure In Rs Mn Condensed Cash flow Q1FY20 Q1FY19 FY19 FY18 FY17 Net cash flows from operating activities 3,663 2,167 12,299 3,624 3145 Net cash flows from / (used in) investing activities (5,762) (731) (4,077) (1,878) (2906) N
Slide 15: Improved profitability through efficiencies and cost focus
Improved profitability through efficiencies and cost focus 1 Significant improvement in Days Working Capital …. 3 Other Income up 125% YoY and 44% QoQ In days In Rs Mn Q1FY20 Q1FY19 FY19 FY18 FY17 Other Income Q1FY20 Q1FY19 Q4FY19 Other Financial Income (A) 118 8 84 Net Working Capital 29 83 53 72 1
Slide 16: Company Overview
Company Overview
Slide 17: Polycab: A Snapshot
Polycab: A Snapshot One of India’s Leading Electricals Brand with INR 80bn revenues1 #1 Manufacturer of Wires • c.18% Organized • Exports to 40+ countries 1 • c.12% Total Market Share3 • Over Last 3 Years and Cables2 • c.51% Growth • Diverse Product Portfolio across 2 Fast Growing FMEG business • CA
Slide 18: Our Journey
Our Journey • Set up manufacturing facility for PVC • Promoters established the • Company incorporated on Jan 10, insulated power cables house wires, • Crossed INR 10,000mn business; manufacturing from 1996 telephone cables, optical fibre cables, in revenue Halol plant switch board cables and quad c
Slide 19: Key Management Initiatives in the recent year
Key Management Initiatives in the recent year Focus on Profitability and Growth Improvement in Production Processes Induction of Qualified Professionals Expansion of Manufacturing Capacity Expansion of Distribution Network Improvement in Supply Chain Enhance Brand Awareness and Customer Loyalty Inve
Slide 20: One of India's leading Electricals brand - a market leader in Wires & Cables
One of India’s leading Electricals brand - a market leader in India’s Wires & Cables (W&C) industry and fast growing player in the FMEG category Diverse suite of electrical products W&C market leader 1 FY19 Financials (Rs mn) • Wires & Cables - Power cables, control cables, instrumentation, c.18% ma
Slide 21: Strong political mandate to give impetus to Infrastructure and Industrial Growth
Strong political mandate to give impetus to Infrastructure and Industrial Growth Infrastructure Industrial Consumer Development Growth Spend • Government announced intention to spend INR 100 • Impetus from government initiatives such as: • Increasing Propensity to Spend lakh crore in infrastructure
Slide 22: Market leader in wires and cables with a diverse suite of products
Market leader in wires and cables with a diverse suite of products and a healthy growth rate Market leader in W&C… Market leader in W&C… • Largest W&C manufacturer in India, in terms of • Institutional and retail customers in different industries segment revenues, with a market share of c.18% of • M
Slide 23: Wires & Cables - Attractive market opportunity & strong leadership position
Wires & Cables - Attractive market opportunity & strong leadership position Wires & Cables Poised for Faster Growth1… Polycab is a Market Leader in Wires and Cables Segment… In FY18: Wires and Cables industry was: FY19 Wires and Cables Revenue Polycab’s Market Share in FY18 40 – 45% of the electrica
Slide 24: Expanding presence in 'Electricals' ecosystem - Fast growing FMEG business
Expanding presence in ‘Electricals’ ecosystem - Fast growing FMEG business Co m prehensive p ro duct p o r tfolio with fo c us o n th e u p c oming in d u stry tren ds • Launched Switches business in FY14 • Diversified into the FMEG segment in FY15 • Key FMEG products include – electric fans, LED li
Slide 25: High Growth Opportunity in the Indian FMEG Industry
High Growth Opportunity in the Indian FMEG Industry Fans1 Switches2 Switchgear3 Lighting4 Water Heater5 63 80 111 30 40 62 139 183 286 142 212 301 12 18 32 Domestic Industry 22 12 23 60 10 Opportunity 20 19 18 19 10 74 (INR bn) 89 11 50 263 241 7 22 60 30 165 99 138 5 44 19 120 7 11 43 FY14 FY18 FY2
Slide 26: Strong Brand Recognition in the Electricals Industry
Strong Brand Recognition in the Electricals Industry Leveraged the “POLYCAB” brand to expand the customer base, cross-sell products & expand internationally Advertising and Sales Promotion Expenditure (INR mn) Multi-Pronged Actively Increased 0.4% 1.5% Approach to Engage the Loyalty Points Advertisi
Slide 27: Multi-location manufacturing, high degree of backward integration
Multi-location manufacturing, high degree of backward integration Product (1) Location Annual Capacity Multi-location manufacturing… Wires & Cables (in kms) Halol/ Daman 3.5 million • 24 man ufacturing facilities, across th e states of Gu jarat, Lighting & Luminaires Chhani 18.2 million Mah arashtra
Slide 28: Supported by strong R&D, innovation and quality initiatives
…supported by strong R&D, innovation and quality initiatives Investments in in-house R&D capabilities… … have led to innovations in our product range • N ABL ISO 17025 certified R& D center; ~90 en gineers an d tech nicians working on R& D p rojects • Flame retardant elastomeric comp ounds, flame re
Slide 29: Pan India distribution network supporting our diverse customer base
Pan India distribution network supporting our diverse customer base and product categories Our distribution reach Pan India distribution across product categories • 3,400+ au thorized d ealers an d d istributors Common for West East • 100,000 retail ou tlets W&C and FMEG 20% 22% Wires and 17% Cables
Slide 30: Proven track record of financial performance (1/2)
Proven track record of financial performance (1/2) Revenue Revenue Annual Revenue Growth EBITDA EBITDA EBITDA Margin PAT PAT PAT Margin INR mn INR mn INR mn 10.6% 5.7% 23.2% 17.5% 14.9% 9.6% 9.6% 10.5% 11.7% 12.7% 13.3% 3.4% 3.6% 4.4% 5.3% 6.3% 7.0% 10,142 79,560 5,003 67,703 7,934 54,940 3,586 52,0
Slide 31: Proven track record of financial performance (2/2)
Proven track record of financial performance (2/2) ROCE/ROE Debt/Equity ratio Capital Expenditure INR mn INR mn INR mn 0.44x 0.43x ROCE ROE 27.9% 2,994 0.36x 2,793 23.4% 0.34x 21.0% 2,360 2,208 16.3% 15.0% 15.2% 1,817 17.5% 16.2% 961 15.2% 12.0% 0.10x 9.9% 10.5% 0.06x FY2015 FY2016 FY2017 FY2018 FY2
Slide 32: Building Blocks to Implement Future Strategy
Building Blocks to Implement Future Strategy Focus Areas Strategy 1 • Expand into new customer segments, geographies, products • Increase focus on international markets such as Africa, UAE etc. • Target growth sectors like mining, infra, renewables, telecom, railways etc. Enhance Leadership • Invest
Slide 33: Building Blocks to Implement Future Strategy (Cont'd)
Building Blocks to Implement Future Strategy (Cont’d) Focus Areas Strategy 4 • R&D: Optimizing and automating production processes like ASRS1 implementation and auto replenishment of inventories • Invest in CRM systems to enhance customer relationships and services • Undertake Salesforce Automation
Slide 34: Polycab's Competitiveness will Continue to Drive Success
Polycab’s Competitiveness will Continue to Drive Success Operates in one of the Fast Growing Economies with Core Drivers for Electricals Sector Market leader in Wires and Cables in India Pan – India & Global Distribution Network and Exports to 40+ countries Multi – Location Manufacturing Capabilitie
Slide 35: Leadership team
Leadership team Board of Directors Key Management Inder T. Jaisinghani Ajay T. Jaisinghani R. Ramakrishnan Bharat A. Jaisinghani Nikhil R. Jaisinghani Anil Hariani Anil Shipley Manoj Verma Chairman and Whole-Time Director Chief Executive Director – FMEG Business (Non- Director – LDC Business Directo
Slide 36: Shareholding Pattern
Shareholding Pattern Others 14.1% FPI3.3% MF 4.4% IFC 9.5% 68.7% Promoter Notes: As on June 30th 2019 35 Polycab India Limited
Slide 37: Contact us
Polycab India Limited CIN: U31300DL1996PLC266483 Contact us: For investor relations: investor.relations@polycab.com For queries on shares & investor grievance: shares@polycab.com Website: www.polycab.com 36 Polycab India Limited