Polycab India (NSE:POLYCAB) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Polycab India Limited Q2 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note this conference is being recorded. I now hand the conference over to Mr. Nient Maru, Chief Financial Officer, Polycab India Limited. Thank you, and over to you, sir. Thank you. A very good evening to everyone, and thank you for joining us. I hope all of you are staying healthy and gearing up for the upcoming festive season.

0:49 On this call, we shall discuss the Q2 FY 'twenty seven results, which were approved in the Board meeting held earlier today. We will be referring to the earnings presentation, financial results and financial statements, which are available on the stock exchanges as well as on the Investor Relations page of our website. Joining me today from the management team, we have our joint Managing Director, Mr. Nikhil Jay Senghani and Head of Investor Relations, Ajithya Nathani. Let me now hand over the call to Nikhil for his comments. Over to you, Nikhil. Thanks, Lehund. Good evening, everyone.

1:36 As we conclude the first half of FY 'twenty seven, I am pleased to share that Polycab has delivered its highest ever quarterly and half yearly revenue and profitability. This performance underscores the resilience of our operating model and the strength of disciplined execution across the organization. The wires and cables business continues to deliver robust growth supported by healthy demand trends, strong market positioning, and consistent execution. The SME segment continued to strengthen its growth trajectory and recorded its seventh consecutive profitable quarter. Across the organization, we remain focused on execution excellence, translating strategic priorities into tangible outcomes while building a stronger foundation for sustainable long term growth.

2:34 Encouragingly, the initiatives under our strategic roadmap, Project Spring, are progressing in line with plan and are already beginning to lead meaningful results, reinforcing our confidence in both the strategy and our ability to execute it effectively. As we look ahead, our priorities remain firmly anchored on sustaining growth momentum, further enhancing our competitive advantages and investing in innovation, talent, and capabilities. With a strong foundation in place and clear strategic direction, we are well positioned to capitalize on emerging opportunities and create enduring value for all our stakeholders. With that, I would now like to hand over to Nir.

3:23 Thank you, Nikhil. While the global macro environment remains volatile during the quarter, we continue to believe that India remains one of the most compelling structural growth stories globally. Geopolitical tensions, elevated energy prices, higher global bond yields and disruptions across certain international shipping routes have created near term uncertainty across markets. However, India continues to navigate and grow supported by strong domestic demand, healthy investment activity, accelerating infrastructure creation and increasing manufacturing competitiveness.

4:13 The IMF in its latest outlook has raised India's growth outlook by 60 basis points despite higher global energy prices, citing stronger economic momentum, robust services activity and sustained domestic demand. This confidence is reflected in the recent upward revisions to India's growth outlook by several other global agencies. Domestically, GDP growth for Q1 FY 'twenty seven came in at 7.8, underscoring the resilience of the economy despite an increasingly uncertain external backdrop.

5:02 Global monetary conditions remain tight as central banks continue to combat inflation resulting in higher quality rates and bond yields across major economies. In India, the Monetary Policy Committee, MPC, unanimously raised the RECO rate by 25 basis points to 5.5% and shifted the policy stance from neutral to calibrated tightening, implying interest rate cuts are not anticipated in the near term. While the external environment remains challenging, India's strong domestic demand, robust banking system and sustained infrastructure investments continue to underpin the economic resilience.

5:56 What gives us confidence is the breadth of growth visible across the economy. GST collections continue to remain healthy, growing by 15% year on year. In July August, government capital expenditure remains significantly at higher levels and bank credit growth continues to trend close to 15 to 20%. Power demand has remained robust, reflecting healthy activity across industrial, infrastructure and commercial sectors. The focus on infrastructure development continues, which is reflected in the government CapEx spend of INR5.10 lakh crore during April to August 2026 implying an 18% year on year growth.

6:52 The government has also approved another 1.9 lakh crore of capital outlay for Green Corridor Phase three, which includes evacuation of 135 gigawatt of renewable energy and deployment of battery energy storage systems. All of this signal strong economic activity in India over the medium to long term. This structural growth drivers continue to reinforce the long term opportunity outlined under the project space. While the near term inflationary pressures are surfacing due to macroeconomic situations, both urban and rural demand continues to remain healthy, while government support measures are expected to aid broader consumption growth going forward.

7:48 Importantly, India's revenue base remains predominantly domestic, which provides a degree of resilience in periods of global uncertainty. Continuing on the momentum, the company delivered yet another remarkable quarter of strong performance underpinned by healthy revenue growth and profitability. Our performance reflects not only favorable demand conditions, but also the deliberate investments and strategic choices made over the past several years. The wires and cables business continued to see positive momentum, leveraging its market leadership and execution capabilities, while the FMG business has outperformed the market across categories supported by a growing product portfolio and a wider customer reach.

8:44 The progress we have achieved is underpinned by strong execution across our strategic priorities and continued investment in our growth prospects. We remain committed to operational excellence, disciplined capital deployment and creating greater value for our stakeholders and customers across every touch point. Looking ahead, we see significant opportunities across our markets. Our priority will be to accelerate our growth initiatives, strengthen our brands, deepen distribution and build the innovation and talent ecosystem needed to support the next phase of expansion.

9:36 To sum up, our outlook remains unchanged. While commodity volatility, geopolitical development and logistics related disruptions may continue to influence individual quarters, the structural drivers of the demand remain firmly intact and in place. We remain focused on disciplined execution of our Project Spring strategy, strengthening our market leadership position and investing behind the significant long term opportunities emerging across infrastructure, energy transition, manufacturing, urbanization and exports.

10:23 Now we would like to update you with reference to the ongoing proceeding with respect to Asia Metals that we have filed an appeal before the Honorable National Company Law appellate cabinet, Principal Bench, New Delhi and the Honorable NCLAS has stayed and kept in abeyance the order of admission in its entirety, including that of it being a commercial dispute of INR 2.79 crores to set aside the order of admission passed by NCLP and initiation of the Corporate Insolvency Resolution Process, CIRP, against the company.

11:11 The company had gone for an early hearing on October 15, which is today, and we are of reasonable opinion that we have argued well on the hearing and are reasonably confident and hopeful that we have a strong case with grounds on merits and the judgment may land in our favor. We continue to monitor the situation and follow the due process as per law to get this resolved as quickly as possible. We do not expect any adverse or material impact on our financial or business operations arising from the safe situation.

12:01 I would now hand over to Aditya to take you through the financial performance for the quarter. Thank you, Niyant. For the quarter ended 09/30/2026, we delivered an exceptional performance reflecting the strength of our diversified business portfolio, disciplined execution and sustained demand across our end markets. Consolidated revenue grew by 53% year on year with all business segments contributing meaningfully to this growth momentum. The company continued to maintain a strong operational performance during the quarter. EBITDA increased by 39% year on year, while EBITDA margins expanded by more than 50 basis points sequentially to 14.4%, supported by a favorable business mix and continued focus on operational efficiencies.

13:01 Profitability remained robust with profit after tax reaching a record high of INR 9,900 million, representing a 43% year over year increase. PAT margins stood at 10% for the quarter, reflecting healthy earnings growth and sustained margin resilience. Our financial position remains very strong. Net cash stood at INR 45,200,000,000 as of 09/30/2026, compared to INR 29,400,000,000 a year ago. We also witnessed a further improvement in our working capital efficiency with the average working capital cycle reducing to approximately eleven days in second quarter fiscal 'twenty seven.

13:52 This was aided by higher payable days arising from the increased use of letters of credit for our raw material procurement. As these benefits gradually normalize, we expect the working capital cycle to trend towards our long term operating range of forty five to fifty days. During the first half of the year, we incurred capital expenditure of INR 6,100,000,000, reflecting our ongoing investments in capacity expansion, supply chain capabilities and future growth platforms. On a half year basis, I am pleased to share that H1 FY 'twenty seven marked the strongest first half performance in the company's history in terms of both top line and profitability.

14:39 Revenue grew by 46% year on year, crossing a significant milestone of INR 180,000,000,000. EBITDA increased by 36% year on year with margins remaining healthy at 14.1%, while profit after tax grew by 38% year on year, translating into PAT margins of 9.9%. Let me now turn to Slide six and discuss the performance of our Wires and Cables business. The Wires and Cables segment delivered a strong quarter, recording 47% year on year revenue growth. Within this, the domestic Wires and Cables business grew by an impressive 50% year on year, driven by healthy demand conditions, strong channel execution and favorable commodity linked realizations.

15:32 We delivered a volume growth of mid to high single digit range on top of a strong base from the corresponding quarter last year, demonstrating the underlying strength of demand. Within the portfolio, Wires continued to outpace Cable in terms of growth. Channel sales also grew faster than institutional sales, underscoring the resilience and effectiveness of our distribution leg model. From a regional perspective, the West remained our largest contributor, followed by the South, North and East, highlighting the broad based nature of growth across markets. Despite challenging geopolitical environment, exports picked up strongly during the quarter as sales grew 17% year on year and grew 85% quarter on quarter.

16:23 While exports accounted for a relatively lower share of overall revenues, the moderation in contribution is largely attributable to the significant faster growth in the domestic market, which expanded the overall revenue base. We continue to maintain a strong export order pipeline and remain confident about our long term growth prospects of this business. EBIT margins in the Wires and Cable segment stood at 14.2%. Margins improved sequentially, supported by a favorable product mix and continued operational excellence initiatives. In line with our Project Spring road map, we remain confident of sustaining medium to long term EBITDA margins within our guided range of 11% to 13%.

17:11 Turning now to Slide eight and our FMEG business. The FMEG segment delivered a breakthrough quarter, registering a remarkable 124% year on year growth with strong performance across all major product categories. Notably, this marks the eleventh consecutive quarter of industry leading growth, reflecting the effectiveness of our strategy, execution capabilities and strengthening market position. Solar products, which constitute the largest category within our FMEG portfolio, continued to be the primary growth driver, registering multipole growth during this quarter. The segment continues to benefit from favorable structural tailwinds, including the PM Surya Ghar Yojana, various state level support programs and accelerating consumer adoption of renewable energy solutions.

18:04 We remain highly optimistic about the long term opportunity this category presents. The broader SME portfolio comprising fans, lighting, switches, switchgears, conduits, pipes and fittings also delivered healthy growth. Performance was supported by sustained momentum in the real estate and construction sectors, alongside our focused efforts on product innovation, distribution expansion and deeper customer engagement. The segment also achieved a major profitability milestone with EBIT margins crossing the double digit mark for the first time and recording a 10.1% margin during the quarter. Since achieving profitability in Q4 FY 'twenty five, the business has consistently strengthened its earning profile while continuing to invest in talent, product development, innovation and brand building initiatives.

19:01 Looking ahead, we remain highly confident about the long term growth trajectory of the FMG business. Our objective continues to be growing at 1.5x to 2x of the industry growth rate while steadily enhancing profitability. Investments in distribution reach, product innovation, category expansion and brand equity will remain central to driving sustainable value creation. Moving to Slide 10 and our EPC business. The EPC segment reported revenues of INR 6,171 million in Q2 FY 'twenty seven, representing a healthy year on year growth of 53%. Segment profitability remained strong at INR $444,000,000, translating into an EBIT margin of 7.2%.

19:54 Over the medium to long term, we continue to expect sustainable margins for the EPC business to remain in the high single digit range, supported by disciplined project selection, efficient execution and a healthy order pipeline. In closing, I would like to sincerely thank all our stakeholders for their unwavering trust and continued support. The performance delivered during the quarter reflects the strength of our business model, the commitment of our teams and the success of our long term strategic investments. As we look ahead, we remain focused on executing our growth priorities, enhancing operational excellence and creating sustainable value for all our stakeholders. With that, we conclude our prepared remarks, and we'll be happy to take your questions.

20:48 Thank you very much. We will now begin the question and answer session. The first question comes from the line of Kevin Shah with Aritya Belamani. Yes. Hi, sir. Thanks for the question. Again, congratulations on a great set of numbers.

21:42 So firstly, on the margin, so if you see the 10.1% already at the upper end of your projects in target. So can you highlight what are the key drivers behind it? And which of these segments are profitable? Is this made solely contributed by the Solar segment? And would you be looking to revise your project spend targets? Thank you, Kevin, for your question. For the SME margin question, I think there are a few things that have worked for us in this quarter and probably the kind of initiatives that we have put together over the past few years, and those strategies are actually reaping benefits.

22:28 Now definitely, has increased in this quarter. And as I mentioned in my previous comments, all segments in the quarter have actually grown by multi folds, right, beating the industry growth rates. So that's very much a positive sign for us that all the categories are firing at all cylinders with kind of the strategies that we are implementing. So that's the first part. I think the scale definitely plays an important part and definitely the operating leverage from here. The second part, I think to answer to that margin expansion of up to 10.1% is premium mix has also gone increased in this quarter for various segments. Today, if you see the fans mix is around 33 in the premium category and the lights also now reaching at 38%.

23:15 So all of this is actually contributing to the margin growth. And the other strategic thing that we have been doing in this segment for past year or so is providing a more solution driven approach for our portfolio, right? So today, as you see, we have been as we have already mentioned previously in various calls, the kind of strategy that we are putting together, especially in terms of the building verticals, these FIMIGI products are actually complementing to the way we are approaching the end customers. Right? So it's a kind of booking offering that we are doing, and it is reaping benefits for us. Right? So I think there's a scale that is why you see the kind of margins that we have generated in FMEG.

24:04 So all these strategies together is is reaping benefits because if you see earlier also, our strategy was largely on Pan India business. Right? Today, the strategy has moved regional specific. And given the kind of P and L strategy that we have, that is driving a lot of profitability. The availability of the products in the market has improved various strategic initiatives that we have implemented, Our Polycab India plans that we have put together in the market is also sort of complementing to this. So I think all of this synthesize is getting us the results for SMEG. To answer to your second question on the growth, I think when we started the project spring and we laid out our margin profile, I think it's for FY 'thirteen, right?

24:51 So over the market, we we would end up in that kind of a range of 8% to 10% of the EBITDA margin. Today, we are already at an EBIT margin of 10.1%, which is very high. I would believe you would appreciate the kind of efforts that we put together to get this segment turnaround in the way we have seen the results in this quarter. And just a follow-up on the margins to increase for the wire and cables margins. So also, there has been a significant increase there. So can we say that this is mainly led by the channel mix improvement? And what are the other drivers? And how much of it do you see it as sustainable given the potential increase in the competition and the distribution channel?

25:39 So so, Kevin, I think that's it. When you look at the margins overall, I think it's a confluence of four, things that we have already highlighted in the previous calls. It's definitely operating leverage has a play into it. If you see our margins margins have expanded around 90 basis points sequentially. So there is the operating leverage that is playing into this sector, right, in this segment. Definitely, the business mix is playing an important part of ours have grown far more better than the cable. So that's a high accretive margin business for us. Definitely, channel has also been better than institutional. So these are four, five things that are very important. And if you see the kind of exports growth that we are also having, that is also sort of supporting to a certain extent. So I think we are very much happy the way we have delivered the kind of initiatives that we have put together and it is visible in the results at the moment.

26:33 And it's 14.4% overall margins. We have wired and cable at 14.2. It's a remarkable story, Kevin. Understood. And secondly, in terms of the potential of the new supplier that is coming into the market, so do you what is the downside or is it that you see to your project spring target? No. I think In terms of the growth as well as margins? Kevin, I mean, you need to understand that this... The guidance that we provided is for FY thirty. Right? So the... It's a it's a CAGR approach that we have taken in terms of formulating these growth rates. Right? So then you may see in some years, you will find the margins have actually gone in the high single digits. Some years, you may find it at a very high margins, at a double digit. So I think we would like would like to be in that guidance range, I think, in FY thirty, and that's how we continue to maintain our stance of our guidance.

27:32 Understood. Yes. Thank you so much for the... For the answer and for that. Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer questions from all participant, please limit your questions to two per participant. The next question comes from the line of Sonali with Jefferies India. Congratulations on a very strong set of numbers. So my first question is in cables and wires domestic. You have grown 50% overall. You have grown 47% revenues. Year mark, what could be our volume growth? And what could be our value growth for that?

28:19 Thanks, Surali, for this question. I think in terms of the volume growth, I think as I alluded in my previous comments that Cable and Wire definitely has done has grown really strongly for us in this half as well. In terms of the volume growth, I think overall, volumes have grown by mid- to high single digits. Breaking down into the cables and wire segment, I think wires have grown in early double digit growth in terms of the volume, and cable has been in the mid single digits. So that's the kind of breakdown that we have in terms of the volume. So that's a great number considering our base of last year was very strong. Yes. I mean, thanks for highlighting that. But I would like to reiterate the fact that last year, it was a very strong base, right? It was 18% volume growth and cables have actually grown around 20%. So I think on top of it, we are growing at that kind of a growth. It's we are very much happy.

29:20 Great. So my second question is regarding your commentary on the IBC hearing today. Sir, please correct me if I'm wrong in my understanding. But today, there was only argument, right? So the final outcome is not yet out. So do we have a next hearing date? Just to give, I think, a clarity, I think the entire case has been heard today. And now probably we have to wait for the actual order which has to come. So we will leave this matter, you know, here. We expect the order to be announced, you know, in whatever time I think it takes by them. Sooner the better. You know?

30:06 Understood. So no completed, and the order is resolved. Understand. So any timeline or, you know, we... We'll just leave it to the time that they require? I would not like to hazard a guess on the time line. But obviously, as a company, we would certainly do the best to see how fast we can get the order. It's... It's something which we will be focusing on. Absolutely, sir. Very clear. Thank you for the and wish you all the best for the festive season ahead as well. Thank you, Abhi. Thank you. The next question comes from the line of Uman Mehta with Kotak Securities.

31:00 Congrats on a strong quarter. My first question was again on margins. You've done 15% work back EBITDA margin in Wireless and Cables in the first half. Now I understand 11% to 13 is your long term guidance. But from a second half or a more one year perspective, how are you looking at profitability? And also if you can share some comments on the new entrant and what... How are you kind of approaching or maybe looking to defend our shares? Yes. Sure. Thanks, Uman. I think, as I mentioned earlier, when you look into the margins, I think there are it's a conference of four, five things that combine together. Your channel has to grow more than your institutional business, your wire has to grow more than your cables, right? And that's how so the mix plays a part here. And definitely, in this quarter, we have seen some kind of an operating leverage that has come into play.

31:59 You would also note the fact that copper prices have also been very high off late in this quarter as well. So that's also kind of helping us to sort of get the on an absolute basis, right, the values on an absolute basis. So I think overall, I think we are happy with the kind of margins that we are generating. Second half also looks very promising, and it's largely driven through the kind of demand that we're seeing right now. We are seeing healthy growth in the second half as well. And based on that, I think we the kind of initiatives that we are putting together as a group in terms of each categories are a big benefit for us. So I think we will continue to operate at a level. We would be happy to operate at a higher end of the guidance that we've given. But as you know, there are different seasonality, there are different periods of years where fluctuations will happen, and that is the reason why we stick to our long term guidance for FY 'thirty.

32:58 Now coming to your question on the competition. Under text entry, I believe the peer that you have been referring to. Yeah. So so so the entry to a particular category of buyers market is today is a very small portion of our overall business. Right? If you see the overall cable and buyers business, the market is roughly around INR 1.1 lakh crores, right? And Wires is roughly around 30% of that market. Even in that market, 30% to 35% is still unorganized. So there is enough room and the kind of growth that we're seeing in this segment, there's enough room for a few players to come and take some pie over here. But however, we don't see any real competition in the near term simply because that VARs market is still very small part of our overall business. And the heat is on the ones who are VARs heavy.

33:49 So for us, any share is operating at a very high margin. So I think if you look at the overall industry, the market is also going to grow in the next two to three years to around maybe INR 40,000 crores, INR 50,000 crores. And with that, the kind of CapEx that Ultratec has put into this industry, the kind of revenue guidance that they have given close to around potential of around 6x to 7x, it looks elusive at the moment, but I think that, again, is a very small part of the overall market. So I think we will create an there is an execution play over here, and we definitely acknowledge the big house and its capability. We will continue to sort of closely watch our competition as we have always done. And if you and just to highlight that over the past every year, we have already gained market share around 1% year. Last year, only we gained opportunities we we lot then action in terms of pricing or anything from your end yet, right, in response to... As of now... Sure.

35:06 Sure. We are moving ahead with our plans soon. Yes. Sure. Sure. Got it. And just one second one was on two growth markets. One was exports. Any outlook from a full year growth perspective? And second one was on data centers. So OSCs, there's a big opportunity there. So anything you are looking to do on that side? Yes. Yes. I think, Uman, good view that pointed out that exports is a very untapped market for India per se, right? And it's a very important growth driver for us. It is doing exceptionally well for us. It is just that the geopolitical situation has dented some of the bookings for us. And obviously, there has been issues with the supply chain globally where shipping lines have actually moved ahead ten to twelve days. So that's the kind of impact we are seeing. But if you look at our numbers, comparing with quarter one and what we have achieved in quarter two, we have gained around 25% increase in our quarter to quarter growth, right?

36:07 So we are pretty much confident that we have a very strong order book in place. Big markets for Us, U. S, Europe, LatAm, Asia, all are contributing significantly to us, right? And if you see last year, today, I think today, we are at 94 countries, right? Last year, we added around 10 countries in our portfolio. So we have a very diversified base in terms of exports. So I think today, I think Chile, probably, I would like to highlight that Chile was one of the countries that also contributed this time in our export revenue. So last quarter, if you see, Oman, Saudi had contributed significantly to our Middle East mix. So I think that's very encouraging to see that we are getting all kinds of demand from these economies and countries. So we are very happy with the kind of growth that we are seeing in exports, and we are very much confident with the kind of pipeline order book pipeline that we are having, exports is certainly going to pick up from here. I mean, obviously, there is a risk element of Mr. Trump, but yes, I think we are very much, know, very confident on the growth prospects.

37:20 Now... Sorry. I mean, coming up on the data center thing, I think if if you see... I think data center definitely is a big market and a very big opportunity for everyone to crack. Right? We are... We... As we have... Already highlighted that we are working towards this segment as well. Our In motion r and d team continuously works to find the right product. And as you are aware, we are... Any which we are supplying the conventional part of the data center. Right? Today, if you see, the market is around 1.6, 1.7 gigawatts of capacity in data center. Right? Some reports have suggested it would go to eight to 10, some probably 15 gigawatts. So there are a lot of announcement that is happening both in terms of the private and, you know, in terms of the government side as well. But we will need to see the kind of execution that will happen. Yes, there are some pockets in the regions where private CapEx is adding and getting added in different regions with 10 megawatts, 15 megawatts. But I think data center is a very big opportunity for us. So I think we are we firmly believe the kind of capabilities and the distribution network and the kind of product portfolio that we have, we will certainly be able to sort of capture that market sooner.

38:27 Sure. Okay. Thank you so much, and all the best. Thank you. The next question comes from the line of Ashish Kanodia with Citi. Please go ahead. Yes. Thank you for the opportunity. The first question is on the full year volume growth. How should we think about it? Because second half, especially if you look at the 3Q base, that's very high. From a volume growth perspective, do you expect more like a mid- high single digit volume growth on a full year basis? And within that, most likely, 3Q could be slightly soft and then 4Q benefits because the base will also be lower? Yes. Think, Ashish, you are rightly pointed that Q3 definitely last year quarter, we had a very high base, right, around forty forty five percent of growth that we registered in last year. So that base is going to be high in third quarter. But when you look into the volume growth, I think it's not right to look at it in a sequential basis.

39:27 What we have called out already as an anchor to look into the volume growth that whatever the market grows, we will do 1.5x of that in cable and wire, right? So if the market if you look at the GDP print recently, it's at 7.8% growth. If that kind of market continues, the wire and cable definitely is going to grow at around 1213%, and we will do 1.5x of that. So that's a long term way of looking into the volumes. I think you should also look at more on a ten to twelve month basis. I think quarter to quarter is not the right way to think about it. But so if you look into the twelve months trailing basis, we still, I think, believe we are doing a reasonable sort of value volume growth over here. Sure, Anastik. And second question on the EPC side of the business, I think last time you shared that overall, I think for BharatNet maybe INR 800 INR 2,000 crores and maybe RDS is INR 802,000 crores execution this year. Just wanted to check if... Are you still, you know, working with the same number, or do you think that the execution might improve and we might do better than what we have guided earlier?

40:37 So I think you see the EPC... The nature of EPC business is like, you know, it's it's all milestone based. Right? So we will continue to sort of getting getting orders in terms of the two projects that we are doing in terms of BharatNet and AudiSS. So I think EPC remains in a similar order book profile. Roughly, the order book, I would say, it is close to around 9,000 crores, 10,000 crores. Got it. Got it. And just last one between wires and cables, anything to highlight here like what led to wires kind of outpacing cable? Because from an underlying demand point of view, of course, you see more at a macro level, the demand driver are stronger for cables.

41:22 So was it largely just because of maybe some inventory stocking at the channel level, or was there any other reason why, you know, like, cables relatively grew slower than wires? So, Ashish, I think the growth is largely coming from the demand that we are getting from the different manufacturing and the other mobility side of the space as well. The real estate market continues to be strong. It's not slowed down to that extent. If you see today's year over year number in terms of the launches, it's still up 4% as per the latest numbers, right? So today, we are serving the real estate market demand of 2024, right? 3.8 lakh units were sold and launched during that time, a similar number we saw last year as well. So I think real estate market, which takes major chunk of our manufacturing end market is reasonably strong.

42:13 And what happens is that you also should look into the fact that there is the government also putting a lot of initiatives and schemes in the manufacturing sector, right? If you see the AFP commission is yet to come. That is yet to sort of add another layer of demand towards that because when that's when the housing affordable housing picks up, and that's historically has been the case. So I think there's a lot of demand that is there in the real estate market as well. And so wires are actually contributing to that side as well. And it is very difficult to quantify the end market for a cable and a wire business simply because think some of the wires also act as an ancillary to the cable, right? It also goes to various different industries. So I think overall demand remains very, very, very much healthy and strong, and that is the reason we are seeing these kind of numbers in our quarter.

43:04 Sure, That's helpful. Thank you and all the best. Thanks. The next question comes from the line of Achal Luhade with Numama Institutional Equities. Please go ahead. Yes. Good evening. Thank you for the opportunity. Congratulations on excellent show. Two questions. First, with respect to the institutional segment, while obviously, most of our sales are through the distribution channel, but are you seeing any delay in offtake given the substantial increase Q o Q we have seen in copper aluminum prices? Has that been the case? And how are you seeing the impact of the sharp decline in aluminum price in last two weeks?

43:56 No, I think, Achal, we are not seeing any significant movement with that respect because if you see, copper prices have only gone up 6% quarter to quarter, right? And aluminum has actually come down. So whenever that happens, there will be a restocking and a destocking event. Whenever these copper prices will increase, restocking will happen. And usually, what will happen is that we will pass it on to the end customer. For cables, we do it in a month and for wire, we do it every fortnight. So that is the only play over here. And I think we have not seen any significant pickup in the inventories or channel stocking as of now because, obviously, copper price is still relatively at a higher level, but we are not seeing any meaningful deviation to what we've seen in this quarter.

44:47 Got it. The second question, this is on the balance sheet. If you could clarify, we see $12,500,000,000 kind of line item in the cash flow statement, if you could explain the nature and if that is if there is any one off and this will get reversed in the coming quarter? Think there's no one off assets over there. These are just a part of the kind of the advanced events that we have made towards procurement of some of our inventories. So that is the kind of number you are seeing, the high number INR 1,200 crores roughly number that you're seeing in the cash flow statement. So nothing one off over there. The next question comes from the line of Akshay with UBS.

45:38 Hi. Thank you for for the opportunity, and congratulations on great set. Wanted to understand on the export side in terms of what kind of cables you're seeing more broader acceptability globe... Globally from Indian cable manufacturers. And if you can distinguish this between LV, MV and HV cables? And secondly, on the revenue, like you alluded, H2 is also looking strong. So can we assume, like, the quarterly revenue, which you have achieved in quarter two, the revenue run rate is sustainable, while next quarter, maybe Y o Y volumes base will be high, but this revenue run rate is sustainable based on the trends you are looking on the ground right now? I think I will take the second part first. In terms of the revenue, obviously, the copper prices are at a level where you'll always see that will eventually benefit us at our EBITDA level, right? So if copper price nobody has a view on copper right now. There is a global deficit for sure, but we per se don't have a view on copper, and we never do that, right? So whatever copper prices happen, the good part is that we are not exposed to the kind of volatility that we see. Right? So everything, we just work on a cost plus model. So if these copper prices continue to stay at this level, the only assumption what I can or only conclusion I can give to you is that the demand is very strong. That is that's the reason it's getting absorbed in the market.

47:01 So if copper prices remain at a certain level, it's already up around 30%, 45% on an average throughout this first half of the year, right? So this keeps and if you see, the actually, the copper prices started to tend towards 10,000, 12,000 from December 11 November of December last year, right? So there will be some point where the base will also get, you know, affected in that. So I think we would not like to guide in terms of the revenue growth per se, but it's it's, you know, anyone's guess of how copper price is going to be. And sorry. For the other part? Export, what kind of products you're seeing more acceptability in global market? So for exports, actually, think we...

47:49 Today, are doing all the conventional part of the cables that we... Right? These are all in the base business. Right? So we are doing and we actually... And these as well. So we have... The volumes that we share is is quite reasonable to the mix is towards that. Right? I mean, that's the only guide I can give to you because it is very difficult for us to, you know, guide that what will be the end market. Right? Today, the... If if US... Taking US as an example, we are working to our market reps. Right? So there is a certain level of institutional demand play, and they have a strong holding into the end markets in The US and the deep pockets, they have a demand. Right? So we would not like... We would not probably... At the end of the day, we would not be able to gauge where these cables are actually going, but there's a definite demand from data center and AI and energy transformation that is happening in this. So that's... So these are these are the kind of cables that we are, you know, pushing towards our institutional business.

48:50 Got it. Thank you. The next question comes from the line of Ashish Jain with Macquarie. Go ahead. Yes. Hi. Good evening, Ashish. So, Ashish, my first question is on Cable and Wire margins. Like in the last two, three quarters also, with such high copper prices, we have been able to maintain margins in 13%, 14% band. But long term, we are still holding 11% to 13% range guidance. So is that largely on competitive intensity or there's something else there or are we just conservative here? How should we think about it? No, Ashish. Ashish, as I alluded in my previous comments, you know, we we are not taking any initiative as of now in terms of competition per se. Right? We don't need to do that. The only thing, right, I can sort of give you that whenever you think on the margins, I mean, as as I said, there's a conference of four, five things in place.

49:47 You know, there is a there is a kind of a mix that plays into the fact. Every year, you may see a mix getting changed, right? Last year, if you see cables outpace wire. Today, what we are seeing is that wires are outpacing cables. So that mix will keep changing, and it will play with the margins as well, right? Exports, if you see today, it's a very high margin then the strong. Strong. Market is very But if you see a couple of years back, we did export did actually contribute around 7% to 8%, right? So these mix will keep changing, and that's why that's the reason why we say we have when we published our project spring target, we did some simulation around it. So if all things come together, definitely, we'll see margins going to north of what we are seeing today.

50:43 Today, in this quarter also, and there's a certain amount of operating leverage that we have got, Our business mix has improved. The channel has done better than institution, and there's a certain level of premiumization team that is going, which is driving some part of it, right? So I think all these things combined is getting us this kind of margin. But over the longer term, you will always have to look in the perspective that it will normalize to a certain level, right? So that's how we should think about it. Okay. So an extension of that. So in second half also, do you think wires could continue to grow faster than cables? Is that our base case expectation today based upon the trajectory we are seeing as we speak? I mean we would not like to give any guidance on that. We are not we never share that kind of a guidance. We have to wait to see how demand shapes up in the next quarter or so. So these will keep changing, Ashish. So it's very difficult to say if cable is going to outpace wires in the next quarter or so. I think that's not the right way to think it. Today, in the first half, definitely, wires have done better than cables, but there's a lot of play around it. So I think we can't give you on record that on the kind of growth in each segment that we The next question comes from the line of Ravindra Nath Nayak with Nirmal Bank Securities.

52:23 Mr., your line has been unmuted. Please go ahead with your question. Okay. Am I audible right Yes. Yes, you are. Thank you. Thank you very much, Adi. My question regarding the... You mentioned that what is the unorganized competition in unorganized market in the wide segment currently, outside segment? So we don't... Ravindra, we don't really share that kind of a breakdown as per No. No. I I... I'm asking the industry. I'm gonna speak market right now and a housewife. Wires market is roughly around 30% of the overall pipe. So you can do the math and One pipe?

53:10 If you are... It... It's 30%. It's 30% of Okay. 30%. Okay. So our share would be... How share would be 30%? We don't give In terms of revenue? We don't give a breakdown of our market share based on a segment. On a combined basis of cable and wire industry, even in the organized market, we have given our call out in our annual report that our market share is around 30 to 31%. Okay. No. That's why I agree, but, you know, I'm just talking about only the housewares segment. That's why asking. I don't think that we don't give Okay. No problem. Thank you very much. Thank you. You. All the best. The next question comes from the line of with Asian Market Securities. Please go ahead.

53:59 Hi, sir. Thank you for the opportunity, and congratulations on great set of numbers. Most of the questions have been answered. Just wanted to check on the EHV side of the business. When can we expect it to be commissioned? And, you know, when can when can we expect it to start contributing to the top line? I'll just hand... Thanks for asking this question. So I would like to take this opportunity to sort of also letting mister community know that in terms of our EHV plant timeline, we are expecting the EHV plant to now commission somewhere in FY 2020... The next year, FY '28. And the the contribution will start? With it, the reason is that... The reason it may happen that the the commissioning may start in April. It may start in May. So that's the reason why we are giving you the timeline of the next year of the 05/28.

54:54 Got it. Got it. Thanks a lot. And just lastly on the competition side, so I... You know, we went out for the channel checkout in the market. So the competitors, why hasn't started coming out in the market, and they have strategically positioned themselves at least 10 to 15% lower to all the existing players. So what are you picking up from the ground? What's the... What are the major areas they're supplying to? Maybe just initial comments on that. So, Vivek, I think you have your own channel checks, and we have our own channel checks. And I think that kind of margin, what you're referring to probably, you know, not in terms of class two. Right? I mean, that's that's the overall essence that I have. Your channel check is different to probably us.

55:40 We have a lot of set of channel checks and distribution network. We are not seeing any any sort of pricing correction right now. Got it. That's very helpful. Thanks a lot, and all the best. Thanks. The next question comes from the line of Rahul Agarwal with the KeyKey Asset. Please go ahead. Yeah. Hi. Thank you so much. Good evening. Just a couple of questions. Firstly, the solar business, which is part of the FMEG. Just wanted to appreciate growth for this segment a bit better. Firstly, you know, what what is the type of products Polycab is doing on the solar rooftop side? You know, if you just explain the nature of the product, what are the what are the items and what are you manufacturing in house? And second is, you know, I understand that the same exact mix is not available, which I understand. But as you said, it's majority of it growth rate is coming from solar.

56:43 There's some bit of sense on the order book on the revenue run rates going forward on solar. It will help us better appreciate what's happening with, you know, the appliance business, which is a fan kind of pipe change in your business, and then, you know, the balance on the solar side. So that's these two questions on solar side. So so on the first question, first part of the travel is we are only doing inverter in the solar category. So that's that's largely a trading business for us, And this is only that's the only category in the model that we have in our solar business, and it is growing multiple to be aware. There is a very strong demand in the market, and we are getting this segment grow far better in terms of the growth that we are seeing. And that is also driving the overall SME business. Now to come to a second part of your question is that, as I alluded in my previous comments, all six categories in the SME business are actually growing significantly stronger today, all right? So it is not just one particular segment that is driving results, but all the segments, including your lightings, your switchgears, your fans, your pipes and conduits, every category is beating the industry growth. So I think that's very, you know, very much very much stronger, and that's the kind of turnaround that we have done in this business.

58:07 So just to follow-up. So on on solar, which is including SMEG, we are just doing what else for solar inverter. We are not actually getting into other solar panels or solar rooftop installation. Is that correct? Yes. As of now, we are not doing any manufacturing side of it. Whenever we believe that there is an opportunity out there, we will definitely not shy away to do that piece as well. But today, we are just doing the motors. And if you could just give some guidance how should we look at any run rates for this business? So I think, Rahul, the kind of growth that we are seeing in SMG, we are very much confident that we would love to do this kind of a level, and then we are very much confident that this growth is further going to increase. It's a mix. The the the segments, entire mix to our portfolio is certainly going to grow.

58:56 Got it. And just one question for Michel, if you could answer. You know, on the copper sourcing side, I understand Polycab does 100% of imports on copper. And globally, you know, we have been reading reports around copper supply demand mismatches for various multiple reasons, you know, where pricing, nobody really knows. But in terms of your own sourcing plan, how would you think this more longer term, you could share some thoughts around next three to five years? You know, we continue to do 100% imports. Are we looking at domestic sources? And, you know, how could that impact industry growth in case, you know, copper is really short of supply into Indian markets for cable environment? So any thoughts around that will be helpful. Thank you. Yeah. So so the only thing that I can sort of guide you towards the fact that, you know, today, we are doing 100% of copper and market dynamics, suggest today that it's beneficial for us doing this. We never know how the mix is going to go in future. Nobody knows the sourcing part of it, right? Today, if you are sourcing some plant from some part of the country and that country shipping line can disturb. So obviously, any any business you would try to navigate.

1:00:08 Today, we are not seeing any such sort of arrangements. We are happy with the kind of arrangements today we have have in terms of our copper sourcing. So today, everything is important right now. Okay. Got it. Thank you so much, and all the best, and wish the team a happy day. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Suneet for closing comments. Thank you, everybody, for the questions which you have raised, and I hope we have been able to give a proper answer. I would also like to wish all of you a very happy Diwali and a prosperous New Year coming ahead and good luck for the season. Thank you.

1:01:02 Thanks. Thank you. On behalf of Polycab India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.