Polycab Q1 FY27: Strong Growth, Better FMEG Margins, and a Watchful Eye on Working Capital

Polycab India delivered another strong quarter in Q1 FY27, led by broad-based momentum in its core Wires and Cables business and a sharp step-up in profitability in its fast-scaling FMEG portfolio. Consolidated revenue from operations rose to INR 82,097 million, up 39% year on year. EBITDA increased 32% year on year to INR 11,362 million, while reported PAT grew 33% to INR 7,967 million. Management described this as the company’s highest ever quarterly PAT.

The quarter also highlighted two themes that investors will likely track through FY27: the continuing structural improvement in FMEG margins, and the interplay between commodity prices, channel stocking, and working capital. Polycab ended the quarter with a net cash position of INR 39.9 billion, but also acknowledged that the unusually low working capital cycle during the quarter was helped by a temporary increase in payable days due to the use of letters of credit.

Consolidated performance: strong growth, stable profitability

Polycab’s consolidated revenue growth of 39% year on year reflected continued execution strength in domestic Wires and Cables and a rapid acceleration in FMEG. EBITDA margin came in at 13.8% in Q1 FY27 versus 13.1% in Q4 FY26 and 14.5% in Q1 FY26. PAT margin stood at 9.7%.

Other income increased to INR 1,049 million, supported by gains on redemption of investments. This helped offset higher finance costs of INR 800 million. The company also disclosed operating cash flow of INR 8,185 million for the quarter.

Segment view: Wires and Cables stays strong; FMEG hits an inflection

Wires and Cables: resilient domestic demand; exports remain soft

Wires and Cables remains the company’s earnings anchor. In Q1 FY27, the segment reported revenue of INR 71,553 million and EBIT of INR 9,533 million, translating into a 13.3% EBIT margin. Management said domestic demand remained resilient and growth benefited from improved execution under Project Spring and commodity-linked realizations.

In the concall, management added context on volumes. Domestic cable and wire volumes grew low to mid-single digits year on year, but on a high base. Wires outpaced cables in growth, with wires at high single-digit volume growth and cables at low to mid-single-digit.

Exports were a weak spot. The earnings presentation noted a 13% year on year decline in international business, linked to near-term geopolitical disruptions. Management nevertheless pointed to diversification and a healthy order book across the U.S., Europe, and Latin America. They also discussed the export mix in Q1, stating that North America contributed around 45% to 50% of export turnover, Europe around 18% to 20%, and Middle East around 20% to 24%, with Oman, Saudi Arabia, and UAE mentioned.

FMEG: record revenue and a sharp margin improvement

FMEG was the quarter’s standout. Segment revenue rose to INR 7,612 million, up 71% year on year and 10% sequentially. EBIT surged to INR 606 million, and the segment EBIT margin expanded to 8.0% from 4.1% in Q4 FY26 and 2.1% in Q1 FY26.

Management attributed the margin improvement to operating leverage and a rising premium product mix. They stated premium mix in the overall FMEG portfolio increased to about 25% during the quarter, with premium mix in fans at about 33% and in lighting and luminaries at about 38%.

Solar products continued to be the biggest growth driver and the largest category within FMEG, with management saying the solar portfolio delivered more than twofold growth year on year. They linked this to structural demand drivers including PM Surya Ghar Yojana, state-level incentives, and increasing consumer adoption of renewable energy solutions. While the company did not quantify category-level revenue, management confirmed solar remains the largest category but contributes less than 50% of FMEG revenue.

EPC: revenue volatility, margin holds up

EPC segment revenue declined to INR 3,077 million in Q1 FY27 versus INR 3,474 million in Q1 FY26 and INR 5,098 million in Q4 FY26. Management said this largely reflected the timing of project execution cycles. Despite lower revenue, segment profitability remained healthy with an 11.0% EBIT margin.

On Bharat Net, management provided an important risk mitigation detail. They said the company has already secured fibre for the next 2 to 3 years of execution, limiting exposure to current high fibre prices. They also reiterated that Bharat Net margins are expected to be in the high single-digit range and quantified the contract size as INR 8,000 crore overall, with INR 4,500 crore related to execution over three years.

Working capital, pricing, and the evolving risk map

A notable feature of the quarter was the sharp improvement in working capital metrics. The company reported average net working capital of 15 days in Q1 FY27. Management clarified that this was aided by a temporary increase in payable days due to the use of letters of credit for raw material procurement. They expect working capital to normalize within a long-term range of 45 to 50 days as the effect reverses.

Commodity-linked pricing dynamics were also visible in the discussion on channel stocking. Management said stocking tends to increase when copper and aluminium prices rise and destocking occurs when prices decline. They noted that steep declines in aluminium and a correction in copper during June contributed to stocking being below expectations. They also disclosed that a price revision of about 3% to 4% was taken in the first fortnight of July.

Beyond operating factors, Polycab’s regulatory disclosures also matter. In the financial results notes, the company disclosed uncertainty around new Extended Producer Responsibility obligations under the Hazardous and Other Wastes Amendment Rules, 2025, effective 1 April 2026. The company said it cannot reliably estimate the impact because the implementation framework and certificate trading mechanism are still under development.

Takeaways

Polycab’s Q1 FY27 performance reinforced the strength of its core Wires and Cables franchise while showing that the FMEG transformation is becoming more visible in reported profitability. With FMEG EBIT margins at 8.0% in the quarter and management reiterating the Project Spring target of 8% to 10% EBITDA margins by FY30, the segment appears to be moving along its stated trajectory.

At the same time, the quarter carried signals that require careful interpretation. Working capital improved sharply, but management described the move as temporary due to letter-of-credit driven payables. Exports were weaker due to geopolitical developments, although management expects traction to improve based on order book and an expanded global footprint. And regulatory uncertainty on EPR obligations remains an open item until the framework is fully notified.

The combination of strong growth, improving mix, and a net cash position of INR 39.9 billion positions Polycab with flexibility. For investors, the next checkpoints are whether export momentum returns as indicated, whether FMEG margins sustain beyond seasonal peaks, and how working capital settles as the temporary payables effect normalizes.