Interview with Gandharv Tongia Executive Director and CFO of Polycab India

20 Jun, 2023

3 min read


Interview with Gandharv Tongia Executive Director and CFO of Polycab India
Company is committed to staying ahead of market trends, delivering superior products and services, and creating long-term value for stakeholders, states Gandharv Tongia, Executive Director and Chief Financial Officer, Polycab India.

Can you shed some light on the overall outlook for the electrical industry in India? 

India's consumer electrical industry plays a significant role in the Country's economy, as India is the third-largest producer and the second-largest consumer of electricity in the world. Comprising Wires and Cables (W&C) and Fast Moving Electrical Goods (FMEGs), the consumer electrical industry contributes to 8% of India's manufacturing production and 1.5% of the country's GDP and is expected to grow at low double digits over the next few years. 

The growth will be driven by factors such as the Central Government’s increased capital outlay towards infrastructure development as well as various government-funded schemes to boost domestic manufacturing crowding in private capex, rural electrification, real estate development, push towards renewable energy, increasing per capita consumption, favourable demographics, consumer affinity towards branded products and many more. Furthermore, the industry will also benefit from government schemes aimed at increasing exports of domestically manufactured electrical products.

What are the company's plans for expansion in the coming years? 

Project LEAP is an exciting initiative that sets the stage for Polycab’s expansion and growth trajectory. With a clear vision to surpass Rs 200 billion in sales by FY26, the company has devised a comprehensive program that encompasses various strategic elements. The company plans to transform its operations, leveraging digital technology to drive operational efficiency, agility and strengthen customer relationships. This will enable Polycab to adapt quickly to market dynamics and capitalize on emerging opportunities to achieve higher-than-industry growth. 

In the immediate future, the company will undertake a capex of Rs 6 billion in CY23, with a large portion of the capex being utilized towards setting up its EHV cable manufacturing facility in Halol, which will become operational by FY26. International business will be another important area of focus for the Company, whereby, Polycab will look to expand its global footprint. Currently, the Company is among the top 10 global wires and cables manufacturers and will aim to be among the top 5 in the mid-to-long term. Under Project LEAP, the Company also plans to increase its higher-margin B2C business, strengthen retail execution & channel excellence to improve sales force effectiveness and focus on distribution expansion to expand its presence in key markets. 

Additionally, to motivate and support one of the most important cogs of business, its employees, the Company recently rolled out a Long-Term Incentive Program (LTIP) to align employees’ interests with the long-term goals of the company. Overall, the company is committed to staying ahead of market trends, delivering superior products and services, and creating long-term value for stakeholders.

You have mentioned that the company is facing some challenges, such as rising input costs. How are you planning to address these challenges?

Prices of commodities such as copper, aluminium etc, which form the raw material for the company’s products have seen high volatility ever since the onset of COVID-19, further exacerbated since the Russia-Ukraine war. However, the organisation acts as a complete pass-through, efficiently passing on the volatility in input costs to its customers. The company revises its product prices monthly, considering changes in the LME rate of copper and aluminium, as well as changes in the USD/INR rates. It also has a robust hedging framework that utilizes contracts with embedded derivates to offset commodity fluctuations. 

This advantage enables the company to maintain its margins within the guided range on an annualised basis, regardless of the volatility or direction of movement in commodity prices. 

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