Polycab India has planned to incur capital expenditure of Rs.300 crore in the ongoing fiscal year, FY21, according to information provided by company officials at a recent investor conference.
Around 35 per of this, translates to around Rs.105 crore, would be directed to the FMEG (fast moving electrical goods) segment. This would include capital investment in the fan factory, as well as factories for pipes, etc. Polycab makes all types of fans, referred to as TPW (table, pedestal and wall), apart from ceiling fans.
The balance 65 per cent would be invested in a combination of backward integration, as well as the cable & wire business. In the cable and wire segment, Polycab would be making investment in setting up capabilities for special cables as well as cables destined for exports.
In the special cables segment, on which specific technical details are not available, Polycab India is planning to focus on import-substitute cables. The company has also been able to secure several approvals for these cables, over the past few quarters, it is learnt.
Polycab now wants to set up a facility for manufacturing such import-substitute cables so that the company can manufacture these domestically, in the true spirit of “Make in India” and “AatmNirbhar Bharat”.
Q4 of FY21
Polycab’s wires and cables business grew 35 per cent year-on-year to Rs.2,487.50 crore in Q4FY21 from Rs.1,843.40 crore in Q4FY20 led by healthy pickup in infra and industrial project activities, improving consumer sentiment, and higher sales realisation. Business performance was broadly consistent across distribution channel as well as institutional business. Institutional business saw a decent sequential recovery. Housing wires sustained strong momentum.
For the whole of FY21, however, the wires & cables business declined by 3 per cent year-on-year to Rs.7,292.10 crore in FY21 from Rs.7,519.20 crore in FY20, hurt by pandemic-induced lockdowns and a higher exports base in FY20.
FMEG does well
The FMEG business of Polycab India grew 24 per cent to Rs.1,034.10 crore in FY21 from Rs.835.60 crore in FY20, indicative of strong consumer traction despite challenges.
For more stories on corporate performance in FY21, click here.
(Featured photograph shows inside view of a wire & cable manufacturing facility of Polycab India)
