Polycab India Ltd- Q2FY21 Analysis

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While the first quarter(Q1FY21) was a washout with a 50% decline in sales on account of 2 months of lockdown. I was amazed by the recovery amidst the ongoing pandemic and intermittent lockdowns across the country in Q2FY21. And that is true for many other publicly listed companies I track.

While the B2B segment of the business continued to struggle(still down 30% YoY), the good performance was led by B2C & Export business. The B2C business consist of both FMEG(Fast Moving Electrical Goods) products such as Fans, Lighting, Switches, etc. and Wires sold in the retail market. FMEG segment grew by 25% YoY while B2C wire business grew in double digits.

The management has always kept its stance clear that they want to venture more towards B2C business focusing on premiumization and distribution.  About 80% of company’s sales are via distribution. And every quarter the number of distributors, retail touch points are growing on a QoQ basis.

Other than distribution, equally important is to have a share of mind space of retail customer for any B2c business.  For that it requires aggressive advertisement campaign. Last year the total add expense was ₹100cr(1.1% of total Sales). This is still much lower than their Havells’ ₹300-400 marketing spend every year, though the company has planned for much higher ad expense than the previous, majorly in IPL.

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Shekhar Yadav
It was only during the third semester in Engineering that Shekhar overheard a Gujarati guy in his class discussing stocks. After a few discussions with him, he realized that this was what he wanted to do in his life.
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