Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil AAA/Stable/Crisil A1+’ ratings on the bank facilities of Polycab India Ltd (PIL).

 

In fiscal 2025, revenue grew by 24% to Rs 22,408 crore from Rs 18,039 crore in fiscal 2024 owing to strong domestic demand for wires and cables, while the operating margin remained healthy at 13.4% (13.9% in fiscal 2024). In the first half of fiscal 2026, revenue grew by 21% to Rs 12,383 crore from Rs 10,196 in the first half of fiscal 2025 supported by 25% growth in wires and cables segment. Operating margin increased to 15.4% in the first half of fiscal 2026 as against 11.92% in the first half of the previous fiscal due to premiumisation and better operating leverage. Crisil Ratings expects the revenue to grow at a healthy rate of 14–15% over the medium term driven by robust demand and timely ramp up of capacities.

 

The company’s topline grew at a healthy compound average growth rate (CAGR) of 20% over the past five fiscals through 2025, supported by consistent investments in capacity additions, extensive distribution network and higher advertising spends. Wires and cables continue to be major revenue drivers, contributing to ~87% of the total revenue catering to diverse end-user industry. In fiscal 2025, wires and cables segment continued its healthy performance with revenue growth of ~18% while maintaining healthy Ebit (earnings before interest and taxes) margin of ~15%. Also, PIL has gradually transitioned from pure business to business (B2B) player to a sizeable business to consumer (B2C) player (retail wires and fast-moving electric goods [FMEG]) with B2C business contributing to ~30% of the overall revenue. FMEG segment contributes to ~7% of the total revenue and has shown strong growth of ~30% in fiscal 2025 led by strong demand across product portfolio. The FMEG segment loss reduced to -2% in fiscal 2025 with it turning Ebit positive in the fourth quarter of fiscal 2025 supported by better product mix. Increasing B2C business, profitability and scaling up in the FMEG business remain key focus areas of the company and hence, remain monitorable. The company is also focusing on diversifying its presence across the international markets.

 

The company’s financial risk profile continues to be comfortable supported by strong capital structure and robust debt protection metrics. Overall gearing remains comfortable at 0.15 time as on March 31, 2025 (0.24 time as on March 31, 2024) and the interest coverage ratio stood at 19.6 times during fiscal 2025 (22.2 times in fiscal 2024). The gearing and debt protection metrics are expected to remain comfortable over the medium term as well in absence of any major, debt-funded capital expenditure (capex). While capex of ~Rs 1,200-1,600 crore per annum is planned over the next five fiscals, it is expected to be funded from internal accrual.

 

The ratings continue to reflect the established brand and fully integrated operations of PIL, and its healthy financial risk profile. These strengths are partially offset by susceptibility to economic downturn, and exposure to high competition.

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of PIL, its subsidiaries and joint venture (JV), as these entities, collectively referred to as PIL, have strong business and financial linkages.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths 

• Market leadership position in wires and cables in India and growing FMEG segment: PIL is the market leader in the Indian wires and cables industry, with 26–27% share of the domestic organised market. Its market position is supported by its strong dealer-distributor network of over 4,300 entities. PIL has significant market share in west and North India, which contributed over 50% to its revenue in fiscal 2025. The end-user segment for wires and cables remains diversified as the company has a varied product portfolio catering to multiple industries such as railways, ports, power generation and distribution, manufacturing, building infrastructure, auto and mining. As a result, the segment has grown at a healthy CAGR of ~20% over the past five years while maintaining healthy Ebit margin of 10–15%. The company is also focusing on international markets to improve its exports (~6% of its revenue in fiscal 2025).

 

The FMEG segment, which commenced in fiscal 2014, has witnessed sustained growth over the past few years and now contributes around 7% to the revenue. The growth has been supported by a growing product mix across different price points and distribution network expansion.

 

PIL also has an engineering, procurement and construction (EPC) division which recorded strong revenue growth of 144% in fiscal 2025 on account of execution of Revamped Distribution Sector Scheme (RDSS) order book.

 

• Integrated operations: The integrated nature of operations result in high-quality output and operating efficiencies. PIL has done significant backward integration including aluminium rod plants, and facilities to manufacture polyvinyl chloride (PVC) compound. The acquisition of Silvan Innovation Labs Pvt Ltd (Silvan) in fiscal 2022, has helped in development of new products to address evolving consumer needs and provide new-age innovative solutions. This is reflected in stable profitability with operating margin sustaining at 13–15% in the medium term. FMEG segment has also turned Ebit positive in the fourth quarter of fiscal 2025 and profitability is expected to improve in the medium term.

 

• Healthy financial risk profile: The financial risk profile is driven by large networth of Rs 9,897 crore as on March 31, 2025 (Rs 8,223 crore as on March 31, 2024) and strong capital structure, as reflected in gearing (including letter of credit [LC] acceptances) of 0.15 time and total outside liabilities to tangible networth (TOLTNW) ratio of 0.39 time as on March 31, 2025. The financial risk profile is expected to remain healthy over the medium term backed by increasing cash accrual, strong liquidity, and absence of any major, debt-funded capex plan.

Key Rating Drivers - Weaknesses 

• Exposure to high competition: The wires and electrical cables industry is fragmented with a large number of unorganised players constraining the pricing power of organised players. Apart from the unorganised sector, PIL faces competition from several organised players as well. While the company has gained market share from large, organised players and small unorganised players over the last few years owing to new product development and its ‘Go To Market’ strategy, the industry remains competitive.

 

• Susceptibility to economic downturns: PIL is susceptible to the economic environment in India. While the electrical cables and wires contributed around 84% to PIL's revenue in fiscal 2025, its end users are diversified including construction (real estate), power, telecommunication, data centres, railways, defence and automobile industries, among others. Growth in these industries is linked to the economic environment, and any economic slowdown could lead to moderation in demand

Liquidity Superior

Liquidity is backed by unencumbered cash equivalents and liquid investments of Rs 25,80 crore and unutilised fund-based bank lines of Rs 500 crore as on August 31, 2025. Available liquidity and expected annual cash accrual of over Rs 2,000 crore per annum, will be more than adequate to meet debt obligation, incremental working capital requirement and capex plan of ~Rs 1,200-1,600 crore per annum over the next five years.

ESG Profile

Crisil Ratings believes PIL’s ESG profile supports its already strong credit risk profile. The sector can have a moderate environmental and social impact, primarily driven by its plastic waste generation, intensive water usage and direct impact of its product on the health and wellbeing of its customers

 

Key ESG highlights:

• The company is committed to transitioning to renewable energy sources such as solar, wind, and hydropower; 43.76 million kilowatt hours (KWH) of electricity has been consumed from renewable energy sources, covering 17% of total electricity use in fiscal 2025. The company aims to consume 50% of the electricity from renewable source by 2030.
• The company reduced 31,336 tonne of carbon dioxide (CO2) emissions — 14,285 tonne from captive solar and wind and 17,051 tonne through bilateral renewable sources.
• Committed in ensuring safety and security of its employees. There were no fatalities during the year and the LTIFR ratio stood at 0.11 in fiscal 2025.
• Governance structure is characterised by effectiveness in board functioning to enhance shareholder wealth, presence of investor grievance redressal mechanism and extensive disclosures.

 

ESG is gaining importance among investors and lenders. PIL’s commitment to ESG will play a key role in enhancing stakeholder confidence, given shareholding by foreign portfolio investors and access to both domestic and foreign capital markets.

Outlook Stable

PIL will continue to benefit from its market leadership position in the wires and cables segment, growing FMEG business, established distribution network and backward integrated operations.

Rating sensitivity factors

Downward factors

• Weaker-than-expected operating performance, leading to low revenue and moderation in the business risk profile
• Sustained decline in operating margin to less than 10% resulting in lower-than-expected cash accrual
• Any large, debt-funded acquisition or capex

About the Company

Incorporated in 1996, PIL operates in the electrical industry and is the market leader in Indian wires and cables industry, as well as a fast-growing FMEG player. The company is also present in EPC business and executes limited projects. The company has 27 manufacturing facilities located across Gujarat, Uttarakhand, Maharashtra, Karnataka, Tamil Nadu and Daman.

Any other information: Not applicable

Name of entity	Extent of consolidation	Rationale of consolidation
Dowells Cable Accessories Pvt Ltd	Full	Subsidiary
Tirupati Reels Pvt Ltd	Full	Subsidiary
Steel Matrix Pvt Ltd	Full	Subsidiary
Polycab USA LLC	Full	Subsidiary
Polycab Australia Pty Ltd	Full	Subsidiary
Polycab Electricals & Electronics Pvt Ltd	Full	Subsidiary
Uniglobus Electricals & Electronics Pvt Ltd	Full	Subsidiary
Polycab Support Force Pvt Ltd	Full	Subsidiary
Techno Electromech Pvt Ltd	Proportionate consolidation	Operational and financial linkages