Polycab Results Snapshot Analysis- 01.06.2020

Polycab (FY19-20)

(i) YoY Revenue Growth – 10.80%- ( Reasonable )

(ii) EBITDA margins has improved from 12.6% to 13.7% in FY20-
( Excellent )

(iii) PAT margins in FY20 at 51.48%- ( Excellent )

However!!

(i) Cash generation in the business is the USP to buy a stock.

(ii) Cash and cash equivalent has gone down from 179 Cr to 172 Cr.

In FY20, on EBITDA of 1216 Cr, the CFO is only 244 cr. That is mere 20% conversion. Generally it is between 60-100%.

So, even though the results are goods, but the business is not generating a cash.

P/E = 13.5 ( Reasonable ).

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