**Polycab - Q4 FY20 (Audited –Cons)**
CMP: 682
Total revenue from operations 2,129 Cr
2,463 Cr (-13.51%) YoY | 2,507 Cr (-15.02%) QoQ
Year ending revenue: 8,829 Cr Vs. 7,985 Cr (10.52%)
Net Profit of 215.1 Cr
140.1 Cr (53.58%) YoY 221.4 Cr (-2.23%) QoQ
Year ending Net profit: 765.6 Cr Vs. 500.3 Cr (53.21%)
EPS (in Rs.) 14.28
9.97 YoY | 14.67 QoQ
Year ending EPS: 50.97 Vs. 35.39
View: Result is overall good. YoY revenue declined but posted excellent profit in this quarter as profit higher by INR 25 Cr for other Income. However QoQ revenue and profit both have declined.
**Business Updates & Highlights**:
Q4FY20 Revenue declined by 14% y-o-y to Rs. 2,129 Cr due to severe impact of COVID-19 during the quarter. The wires and cables business declined 11% to Rs. 1,843 Cr in Q4FY20 from Rs. 2,063 Cr in Q4FY19. Growth in exports and new product categories was offset by impact from restriction of movement during prime sales period. The FMEG business declined 6% to Rs. 183.3 Cr in Q4FY20 from Rs. 195.3 Cr in Q4FY2019
Q4FY20 EBITDA is INR 294.8 Cr Vs. 245.5 Cr in Q4FY19 Vs. 338.8 Cr in Q3FY20 therefore up by 20% in YoY and declined by 13% in QoQ. FY20 EBITDA is around INR 1,127 Cr Vs. 950.4 Cr in FY19 therefore up by 12.8%. EBITDA margin in FY20 is around 12.8% Vs. 11.9% in FY19. EBITDA is growing at 21% CAGR for last five years.
FY20 Export revenue is around 12.3% Vs. 3.1% in FY19.
CAPEX is around INR 289.1 Cr in FY20 Vs. 281.4 Cr in FY19.
**Financial**
ROE and ROCE is around 19.9% and 26.4% respectively and book value per share is around INR 236 and share is currently trading at 2.9x of its book value. Company is currently trading at annualized PE of around 14 which is average as per industry benchmark. Promoter holding is around 68.5% in the company which is very strong and stable. FIIs, Mutual fund hold and IFC hold around 4.9, 2.8% and 9.5% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 244.6 Cr Vs. 122.9 Cr as of March 2019. Debt equity ratio is 0.04X as of March 2020 Vs. 0.10x of March 2019 (Very positive).
Position: Share strong support price is INR 630. Mid / Long term investor should continue with the company with target price of INR 780/850.
**Share View**: Share price high 1,180 (52 week) and now 682 almost 42% corrected from their peak. PIL is a leading Electricals brand with over Rs 88 billion revenue. PIL is the largest manufacturer of Wires and Cables in India and a fast-growing player in the FMEG space. PIL manufactures and sells various types of cables, wires, electric fans, LED lighting and luminaires, switches and switchgears, solar products, pumps and conduits and accessories.
Opportunities: Share is almost corrected 42% from their peak and currently its good valuation. Company has presence of all over the country and highly diversified electric segment. Company has around 3,500 authorized dealer and 125K retail outlets. Company has Strong Brand Recognition in the Electricals Industry. Strong client base includes Reliance, JSW, Asian paints, Siemens Nifty 50 companies clientele. Debt is reducing on YoY and very positive on debt equity ratio.
Risk: Due to Covid-19 impact topline has drastically impacted in this quarter and also lockdown extension for April 2020 also can impact topline in Q1FY21 also and further Profit in this quarter Q4FY20 also includes other income of INR 46 Cr Vs. 21.6 Cr in YoY and therefore profit higher by INR 25 Cr for the same.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
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