Q&A with the CFO

The project encompassed 24 distinct workstreams across various business segments. Each segment had a focused set of initiatives that helped us outperform. For instance, in our Cables business, the merger of the HDC and LDC verticals allowed for better cross-selling opportunities and operational efficiency. In Wires, we introduced price laddering, allowing us to offer a complete product range tailored to different customer segments. Our International business saw remarkable expansion, with our global footprint growing from 55+ countries in FY 2020-21 to 80+ countries today. This growth was fuelled by securing key certifications and approvals, allowing us to tap into high-potential markets and strengthen our presence in regions with increasing infrastructure investments. The FMEG segment benefitted from a sharper focus on new product development, pricing strategies, distribution expansion and robust influencer engagement. Meanwhile, in EPC, we were able to secure meaningful orders under the central government’s RDSS scheme.

Now, as we shift to Project Spring, we are building on the momentum of LEAP while pivoting towards long-term scalability. It’s both an upgrade and a natural progression. For example, in Cables, we are transitioning from a purely customer-centric approach to a more vertical-centric one, allowing for deeper domain expertise and sharper focus. Wires will see the institutionalisation of our micromarket strategy, which allows us to tap into hyper-local opportunities. Our international business roadmap includes not just expansion into new regions but also deepening our presence in current markets. In FMEG, we are investing in brand positioning and premiumisation, which we believe will significantly elevate our market perception and help improve product mix and enhance profitability.

With a favourable macroeconomic backdrop and a structured execution roadmap, we are confident that Project Spring will drive the next phase of Polycab’s growth, across all segments of the Company’s business.

Given the slowdown in public capital expenditure growth in FY 2024-25, how is Polycab navigating near-term challenges in the Wires & Cables segment?

While it’s true that public capex growth has moderated to a certain extent last year, we have remained agile in adapting to evolving market dynamics. Our approach is centred on execution excellence, ensuring that we continue to drive growth despite short-term macroeconomic fluctuations.

In the Cables segment, we have taken a proactive approach by identifying and tapping into whitespaces, geographies and sectors where our presence was limited or where demand was underpenetrated. We are also enhancing throughput from existing markets by deepening our engagement and increasing our market share. Another important lever has been expediting approvals that were pending, which has helped us quickly unlock new opportunities. Additionally, we are aligning our focus with growth in sectors such as Power and Real Estate, which continue to show strong traction despite broader capex trends.

In Wires, we have adopted a grassroots-level strategy by expanding our distribution network, particularly in Tier 3 to Tier 5 cities, where electrification, urbanisation and shift from unorganised to organised players is driving demand. We have also intensified our engagement with electricians and electrical contractors – our key influencers on the ground. Our micro-market strategy allows us to tailor our approach based on regional demand patterns, ensuring a more targeted and effective go-to-market strategy. This, combined with the full rollout of our price laddering model, is helping us serve a wider customer base while maintaining healthy margins.

Interestingly, while public capex growth has softened, private capex in several sectors is on the rise. We are actively pursuing those opportunities to maintain our growth trajectory. The fundamentals of our Wires & Cables business remain strong and our diversified strategy positions us well to weather these short-term macro fluctuations.

With expectations of a consumption rebound, how is Polycab positioning its FMEG business to capture demand?

Over the last four years, we have undertaken a strategic transformation of our FMEG business, focusing on building a scalable, high-growth and profitable model. We realigned our distribution model by working with larger, more capable distributors. We introduced a range of products across price points to ensure we had something for every consumer segment. At the same time, we significantly increased our investments in advertising and promotions to build a strong, differentiated brand. Influencer management was another key focus area — working closely with electricians and contractors who often shape purchase decisions. All of this was backed by a realignment in our internal management structure to bring in sharper focus and accountability.

These efforts are now bearing fruit. We witnessed strong growth in the FMEG business in FY 2024-25 and achieved break-even in Q4 FY 2024-25, which is a significant milestone. Looking ahead, our focus is squarely on execution. We are expanding distribution further and doubling down on brand building. Product-wise, we are emphasising premiumisation in fans and lights, while switchgears, switches and conduit pipes & fittings will be cross-leveraged with our wires business. We are also expanding our product range in solar inverters to tap into the growing clean energy market.

As laid out in Project Spring, our ambition is to grow our FMEG business at 1.5x to 2x the industry growth rate while also improving margins. The expected rebound in consumption only strengthens our confidence in this strategy.

International business has been underperforming for 2 years now. Can we expect the business to see a turn-around in FY 2025-26?

The last two years have been challenging for our international business due to a confluence of various internal and external factors. One of the key shifts was our strategic decision to move from an institutional-led model to a distribution-led approach in the U.S., our largest exports market. While this change was necessary for long-term scalability, it temporarily disrupted our growth trajectory. Additionally, geopolitical developments like the Russia-Ukraine and Red Sea conflicts affected trade routes, increased freight costs and led to the temporary closure of certain geographies.

However, we believe the worst is behind us. The business model transition in the U.S. is now complete and early signs of recovery are visible. With the U.S. elections behind us, we are already seeing a demand revival. We, however, will have to be mindful of the developing situation on tariffs in the U.S. to ascertain the future growth potential of this geography.

We are entering FY 2025-26 with a healthy order book and are optimistic about delivering a strong rebound. The groundwork we have laid over the past two years will start to pay off and we expect our international business to grow meaningfully over FY 2024-25 levels, reinforcing our long-term commitment to increase contribution of the international business to the Company’s top-line.

New competitors are entering the W&C market, while existing players are ramping up capacity. How is Polycab placed in this evolving landscape?

The W&C industry has witnessed a phase of sustained, high-growth momentum over the past few years, establishing itself as one of the strongest-performing sectors in the country. With India in the midst of a structural infrastructure upcycle, we anticipate continued strong demand ahead, providing a long runway for growth. Naturally, this is leading to increase in competitive intensity, with many existing players, who couldn’t fully capitalise on the first wave of growth due to capacity constraints, now scaling up capacity, while, at the same time, newcomers looking to enter the space drawn by the long-term potential.

However, competition is not new to us. Polycab has been operating in this industry for over six decades and we have navigated many such cycles before, consistently strengthening our market position. What sets us apart is our ability to anticipate change and prepare in advance. We have already laid out our strategic roadmap for the next five years and our focus is singular — execution.

We believe the market is large and growing. With the right strategies in place and a strong track record of delivery, we are confident of maintaining our leadership position. Just as we succeeded with Project LEAP, we are determined to replicate and even surpass that success with Project Spring.

Polycab has announced a I60–80 billion capex plan over the next five years as well as increase in dividend payouts. Could you detail the means of funding? How might this impact the Company’s long-term financial flexibility?

Yes, we have significantly scaled up our capex plans in light of the robust growth opportunity in the W&C segment and adjacent businesses. Compared to an annual spend of `2–3 billion just a few years ago, we are now looking at an annual investment of `12–16 billion over the next five years . These investments will be directed toward capacity expansion across all major product lines within the W&C segment, selective expansion in FMEG and strategic backward integration to enhance operational efficiencies.

Even with this heightened capex, we are committed to enhancing shareholder value. We have announced our intention to gradually increase dividend payouts to 30% or more over the next five years.

What’s important to note is that this entire capex plan and increased dividend payout will be funded exclusively through internal accruals, underscoring our strong cash flow generation and financial prudence. We have no plans to raise equity or debt for this purpose. Our balance sheet is in a strong position, with substantial available cash and growing free cash flows.

The strength of our financials ensures we retain full flexibility and are even well-positioned to pursue inorganic opportunities, should they arise. This disciplined and forward-looking approach ensures that we drive long-term sustainable growth while maximising value creation for our stakeholders.

The Company has unveiled a 5-year ESG plan. What are the initiatives of this strategy and how do they integrate with operational and financial goals?

Over the past three years, we have been actively embedding sustainability into our corporate strategy, working on ESG in a structured manner to drive long-term value creation. This included setting up a Board-level ESG committee, an ESG council, appointing a Chief Sustainability Officer and conducting a detailed materiality assessment to identify key focus areas. We had also defined internal ESG targets over the past two years, which helped us build the right foundation.

This year, we have taken a significant step forward by publicly unveiling our five-year ESG goals, spanning 10 measurable parameters across Environmental, Social and Governance aspects. These include goals around renewable energy consumption, water recycling, diversity, safety and more. What’s critical is that we have embedded ESG performance into our operating DNA — KPIs have been defined for relevant stakeholders and a portion of their variable compensation is now linked to ESG performance.

We see ESG not just as a compliance requirement, but as a strategic lever for long-term value creation. For example, improving water efficiency helps lower operating costs; strengthening governance and safety standards reduces risk; and investing in diversity builds a more resilient organisation. Stakeholders can expect us to report transparently on these metrics and track progress year-on-year. Just as we have outlined clear business objectives, we remain equally committed to achieving our ESG goals, ensuring that our growth is responsible, resilient and future-ready.

As we conclude, please share your final thoughts with stakeholders and your vision for the Company’s future.

As we look back at the journey so far, I feel immense pride in what we have achieved together. Completing Project LEAP ahead of schedule was no small feat — it was made possible by the unwavering commitment of our customers, employees, partners and other stakeholders. I want to thank each one of them for their support.

Looking ahead, our focus is firmly on execution. We have laid out a clear and ambitious roadmap under Project Spring and we are entering this new phase with both confidence and humility. The opportunity in front of us is enormous and we are determined to make the most of it — responsibly, sustainably and profitably. Our vision is to build a future-ready Polycab — one that not only leads in market share but also sets benchmarks in quality, innovation and governance. We are just getting started.