POLYCAB INDIA LIMITED (NSE: POLYCAB) Q3 2025 Earnings Call dated Jan. 23, 2025
Corporate Participants:
Gandharv Tongia — Executive Director and Chief Financial Officer
Inder Jaisinghani — Chairman and Managing Director
Chirayu Upadhyaya — Head – Investor Relations
Analysts:
Ravi Swaminathan — Analyst
Unidentified Participant
Achalkumar Lohade — Analyst
Shrinidhi Karlekar — Analyst
Amit Mahawar — Analyst
Praveen Sahay — Analyst
Aniruddha Joshi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Polycab India Limited Q3 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone form. Please note that this conference is being recorded.
I now hand the conference over to Mr. Gandharv Tongia, Executive Director, Chief Financial Officer, PolyCab India. Thank you, and over to you, Mr. Tongia.
Gandharv Tongia — Executive Director and Chief Financial Officer
Thank you, operator. Good afternoon, everyone, and thank you for joining us. Wish you all a very Happy New Year. I hope all of you are staying healthy and safe. As operator mentioned, my name is Gandharv Tongia. I’m Executive Director and CFO at Polycab India Limited. On this call, we shall discuss the Q3 FY ’25 results, which were approved in the Board meeting held yesterday. We will be referring to the earnings presentation, financial results and financial statements, which are available on the stock exchange website as well as on the Investor Relations page of our website.
Joining me today from the management team, we have our Chairman and Managing Director, Mr. Inder Jaisinghani; and our Head, Investor Relations, Mr. Chirayu Upadhyaya.
Let me now hand over the call to Inder bhai for his comments.
Inder Jaisinghani — Chairman and Managing Director
Good afternoon, everyone. We concluded 2024 on a strong note, achieving our highest-ever revenue for the 3rd-quarter and nine-month period, driven by the healthy performance across segments. This is the momentum — momentous operation by us as we have achieved our year five-year guidance of reaching INR200 billion top-line by FY ’26. Ahead of the committed timeline, our calendar year ’24 top-line stand at INR20 billion as 5% overachievement that too over a year ahead of the targeted period.
We are now set to embark on the next five-year journey where after taking a leap in the last three, five years, we are set to spring ahead to our FY ’20 growth potential. With a strong demand outlook, favorable support from the government and our internal transformation initiatives and confident that we are well-positioned to create long-term value of the stakeholders.
With this, I would request Gandharv to give you a flavor of the macro-environment.
Gandharv Tongia — Executive Director and Chief Financial Officer
Thank you. After a period of continuous outperforming, India experienced a slowdown in the last few months with real GDP growing at 5.4% Y-o-Y in Q2 FY ’25. The first advanced estimates for FY ’25 GDP growth stands at 6.4% Y-o-Y, reflecting weaker activity. The NSO highlights that industrial growth has moderated to 6.2% Y-o-Y, significantly lower than the 19.5% Y-o-Y seen in FY ’24. Despite this, India continues to demonstrate resilience as evidenced through several high-frequency indicators. Metrics such as digital premiums, power demand, services PMI.
Air and pool collection points to a sustained recovery. GSG collections rose by 8.3% in Q3 FY ’25, maintaining a robust fiscal year-to-date run-rate of over INR1.8 lakh crores, notably, GST collections have exceeded the INR1.5 lakh crore mark in ’21 of the past 24 months, 22 months underscoring strong and sustained domestic demand. In Russian production posted robust growth of 5.2% in November 2024, improving from 3.7% in October 2024, driven by improvements across sectors.
The manufacturing sector grew by 5.8% with more than 15 sub-sectors registering stronger growth compared to the previous year. Both the mining and electricity sector also recorded strong growth during November. Within the use-based classification, capital goods, infrastructure goods and consumer durables saw healthy increases supported by demand. Additionally, the services and manufacturing PMI have consistently remained above the 50-mark threshold for 41 and 42 months, respectively, indicating an expansion in resales.
The composite PMI, which combines manufacturing and service sales indices rose to 59.2 in December 2024, up from 58.6% in November 2024. On the inflation front, December CPI reached a four-month low of 5.2%, down from 5.5% in the previous month and 5.7% a year-ago, driven by moderating food inflation. Headline inflation also eased to 3.7% from 3.8% in the previous month with a sequential decline of 5 basis-points compared to the 20 basis-point increase observed earlier.
The current slowdown is expected to be transient with a material pickup anticipated in the coming quarters. Government-led public capex is projected to accelerate further supporting infrastructure growth and industrial demand. The real-estate sector benefiting from robust demand and ongoing project launches continues to drive sustained growth.
Additionally, the anticipated interest-rate curves by the RBI in 2025, along with improved private sector demand are expected to provide a significant boost economic momentum. We expect these positive developments to continue to generate strong demand for our product portfolio, enabling us to deliver strong growth consistently as we have done in the past.
As mentioned by Inder bhai in his opening remarks, we have already achieved our project lead guidance of $200 billion top-line in calendar year ’24 itself and therefore are excited to announce the launch of Project, our next five-year guidance till FY ’30. The timing of Project Spring is very important and unlike during the inception of Project Lee, we are now fully aware and in-between an infrastructure upcycle in the country. And in that sense, what we do within Project Spring over the next five years, we have set the foundation for the long-term growth of the company, as we work to set-up the company to achieve multi-decade growth along with the government’s Bharat 20 47 build.
Within Project Spin, the company will focus on six strategic pillars, namely solidifying market leadership in the B2B business, propelling expansion of B2C business, ramping-up the international business, innovation and automation-led holistic development, nursuring talent and capabilities, and lastly and most importantly, growing ESG integration. We are confident that Project will not only enhance our market position, but also deliver long-term value for all our stakeholders.
I would now hand over to Chirayu to take you through the financial performance for the quarter and give you more detailed understanding of Project Screen.
Chirayu Upadhyaya — Head – Investor Relations
Thank you, Gandharv. I will first cover the quarterly numbers and then move to Project Screen. I request everyone to refer to Slide 4 of the earnings presentation. For the quarter ended 31st December 2024, our consolidated revenue grew by 20% year-on-year, driven by healthy performances across all the business segments.
EBITDA grew by 26% year-on-year ahead of top-line growth with EBITDA margins improving by 70 bps Y-o-Y and 230 bps quarter-on-quarter to 13.8%. The improvement in EBITDA margins was account of two reasons. First, normalization in wires and cables margin. As margins in wires business reverted back to normal from lows of the last quarter and as contribution from international business inched up to north of 8%, where it mostly was last year. Secondly, losses in our FMEG business were arrested this quarter on the back of expansion in contribution margins and as we started deriving benefit of scale with improving sales. This positive impact was partly offset by moderation in our EPC business margins.
At the PAT level, our company achieved its highest-ever third quarterly PAT of INR4,643 million with a PAT margin of 8.9%. Finance cost for the quarter stood at INR498 million, while other income totaled INR250 million. A detailed breakdown of finance cost and other income is provided on Slide 17 of our earnings presentation.
Further, our net cash position stood at INR17.1 billion. In addition, our working capital cycle stood at 51 days within our comfort range of 50 to 60 days. Furthermore, our capex for quarter three FY ’25 was at INR2.5 billion, accumulating to INR8.3 billion for nine months FY ’25, in-line with our guidance of doing INR10 billion to INR12 billion of capex during this year.
On a nine-month basis, our FY ’24 revenue, EBITDA and PAT are the highest-ever in the history of the company for a nine-month period. Our revenues have grown strongly by 24% year-on-year, surpassing INR150 billion milestone. EBITDA was up by 12% Y-o-Y with EBITDA margins at 12.5% and PAT grew by 5% Y-o-Y with PAT margins at 8.5%.
Moving on to Slide 6. The wires and cable segment recorded a relatively moderate growth of 12% Y-o-Y during the quarter. The domestic cables business continued to deliver healthy growth. However, high channel inventory at the beginning of the quarter and declining trend of copper prices impacted via so offtake during the quarter. With channel inventory at normalized levels, copper inflationary trend and fundamental demand intact, we anticipate rebound in wire sales during quarter-four FY ’25.
The international business registered a robust growth of 62% year-on-year and 29% quarter-on-quarter, resulting into improvement in its contribution to the company’s top-line to 8.3% in Q3 FY ’25 and 6.6% for nine months FY ’25. Our international business order book remains healthy, positioning us well to sustain this growth momentum in quarter four of FY ’25. We continue to focus on expanding to new geographies, adding one new geography during this quarter, thereby expanding our geographical presence to 81 countries now. The EBIT margins for the wires and cable segment improved by 120 bps on a sequential basis to stand at 13.5%.
Moving on to Slide 8 for an update on the FMEG business. The FMEG business registered an exceptional growth of 45% year-on-year during the quarter on a lower base. Robust execution of our strategic initiatives, including channel expansion, product architecture enhancement and implementation of the influencer management program continued to drive revenue expansion across all product categories.
The fan segment continued its growth trajectory, registering both Y-o-Y and sequential growth. With the fan season commencing this quarter, we anticipate continued meaningful growth in our largest product categories. The lights and segment registered strong volume and value growth after several quarters of decline, despite the ongoing price erosion.
In addition to the festival demand, the growth was supported by introduction of 130 plus new SKUs, geographical expansion into more than 500 towns, addition of 150 distributors in new geographies and 7,000 retailers during the year. The switch gears, quantit Pipes and fittings and switches segments continued to register healthy growth, supported by strong real-estate demand.
As mentioned in the opening remarks, the FMEG segment losses were curtailed during the quarter on the back of gross margin expansion and enhanced operating leverage. With robust growth in the real-estate sector and the sustained execution of our strategic initiatives, we expect demand for FMEG products to accelerate further in the coming years.
Moving on to Slide 10. This slide provides an update on our other businesses, which primarily comprises of our strategic EPC business. We achieved revenues of INR4,573 million in-quarter three, marking 111% year-on-year growth. Profitability increased by 37% year-on-year with segmental margins at 11.3%. Looking ahead, we expect similar quarterly run-rate over the next two, three years as we execute our EPC order book. The segment’s contribution to the company’s consolidated top-line is expected to be in mid to-high single-digit range. The annual sustainable operating margin for this business is expected to be in high-single-digits over medium-to-long term.
Moving to Slide 12. The next few slides provide an overview of our upcoming prior year vision titled project screen. Before I go into the details of the project, I would like to emphasize that certain statements made in the presentation are forward-looking statements. These forward-looking statements reflect the management’s best judgment and analysis as of today. Actual results may differ materially from the current expectations based on the number of factors affecting the business. Please refer to the safe-harbor disclosure at the end-of-the presentation.
Now going deeper into Project, India is currently in a golden era characterized by massive growth opportunities across various sectors. The vision of Wixit Bharat 2047 by the government aims to transform India into a developed nation. As part of this vision, the government has increased its investment towards infrastructure growth in the country via the yearly budget and is committed to supporting it further going ahead.
With continued government investments, the private capital expenditure too is projected to rise from 14% of GDP currently to around 20% of GDP, levels lasting in 2008 during the previous infra up-cycle. High manufacturing utilization levels of around 75% with expected interest-rate cuts, which will boost consumption lay support to the projection.
The real-estate market, which too is currently in a multi-year upcycle is expected to grow to-1 trillion by 2030 and 1.5 trillion by 2034, driven by urbanization as well as the emergence of global capacity centers in Tier-2 and Tier-3 cities. Sectors like energy and mobility too are expected to see strong growth with growing demand as well as increasing investments earmarked for the sectors.
Over and above this, niche upcoming sectors like data centers, electric vehicles, aerospace and defense, exploration, etc., are expected to witness exceptional growth going ahead. These factor collectively create substantial opportunities for the domestic wires and cables industry, which with the industry expected to grow at 1.5x to 2x of real GDP.
The global wires and cables market too is witnessing strong growth, fueled by several transformative trends such as investments in renewable energy projects, adoption of EVs, expanding digitization and hence the need to invest in data centers, urbanization trends with smart city projects gaining traction globally and many more. These factors are expected to propel the global wires and cables industry to grow at a CAGR of 7.5% and reach $410 billion sized by FY ’30. For Indian manufacturers, the China plus fund policy, underpinned by the need of supply-chain diversification for large countries will be an additional growth driver. Overall, we expect the demand for and cables to remain robust in the near to mid-term, both domestically and globally.
Within Project Stream, our goal will be to grow our wire business at 1.5x the market growth with sustainable EBITDA margins of 11% to 13%. Let me reiterate this, we will target to grow our wires and cables domestic business at 1.5 times the wireless and cables industry growth, which is expected to grow at 1.5 to 2 times of real GDP growth.
Our next target is to grow the share of international business to north of 10% of the overall company’s revenue. To be able to achieve this goal, the company will be investing INR60 billion to INR80 billion in capex over the next five years. Most of which will be for the wires and cables business and which will generate asset turn of 4x to 5x.
Now coming to FMEG. We expect the sector to register a growth of 8% to 10% in the near to mid-term, driven by factors like favorable demographics, urbanization, nuclearization, increasing product capita income, increasing brand consciousness and impact of real-estate upcycle. Being a challenger player, we would target to grow this business ahead of the industry growth rate, about 1.5x to 2x of market growth and thereby increase our market-share, in-line with our goal of becoming a top three-player across product categories within this business. This growth will be a profitable one with a goal to achieve EBITDA margins of 8% to 10% by FY ’30 within the segment.
We will continue with the existing product categories within this business and do not plan to add any new categories in the near-future. A small part of the capex mentioned before will be used to expand capacities as and when required. With the wires and cables business expected to generate healthy cash flows and the FMEG business turning profitable, adding to the company’s profitability, we expect to generate consistent cash flows going ahead. Major chunk of the cash-flow will be utilized to do the enhanced capex.
Further, we will continue to gradually increase our dividend payout ratio to greater than 30% by FY ’30 from the current 26.5%. Unutilized cash will then be utilized for any available inorganic growth opportunity. To achieve the discussed target, we have formulated a strategic roadmap, which rests on the six pillars mentioned by Gandharv.
I will briefly touch upon the major work streams within the six pillars. First, solidifying market leadership in B2B. As I mentioned, the country is expected to see investments and growth across all sectors, generating robust growth for wireless and cables. To ensure we capitalize on this opportunity and do not miss out on any, we are transitioning to a vertical-focused structure, wherein we have segregated the industry into five different verticals and we will be creating separate teams focusing on the opportunities within the specific verticals. The business development team as well as the sales team will have the vertical structure. This will help us to focus on all the opportunities existing across sectors without missing out on any.
Further, as part of our mid-term strategy, akin to larger companies across the globe, we would want to transition from merely being a product supplier to electrical solution suppliers. This would entail handholding the customer in their entire join from planning the project to supplying the products required in the project, allowing us to cater to the exhausting needs of our customers. Enhancing secondary sales to focus demand-generation and crafting strategies for sunrise sectors like EVs and data centers will ensure we capitalize on the rapid — rapid domestic and global expansion of the sectors.
Propelling B2C expansion. The domestic market urbanization and premiumization trend offer immense potential for the wires and FMEG businesses. Institutionalizing a micro-market strategy will allow us to address regional demand variation effectively, while scaling our influencer management program will strengthen consumer engagement.
By enhancing our brand positioning and focusing on premiumization, we will be aligned with the growing consumer preference for premium products and energy-efficient solutions. Cost optimization will further ensure sustained profitability as we tap into the expanding real-estate and consumer markets ramping-up international business. The global macroeconomic environment marked by the China policy and significant investments in renewable energy, infrastructure, EV infrastructure, data centers, etc., is expected to generate robust demand for and cable products. Expanding into strategic niche markets with high-growth potential, securing accruals from major EPCs and offering tailored solutions to meet specific geographic and customer needs will drive our international growth, enabling us to increase exports contribution to over 10% of the company’s revenue.
Optimizing distribution and logistics will enhance efficiency, thereby aiding profitability. This approach positions us well to leverage the global market 7.5% CAGR and tap into emerging opportunities. Innovation and automation-led holistic development. Technological advancements in renewable energy, smart cities and digital infrastructure necessitate continuous innovation.
Elevating R&D investments will enable us to stay ahead of the market needs, while supply-chain optimization will ensure resilience and agility. Digitizing processes across stakeholders will enhance operational efficiency and automation-led manufacturing productivity will drive scalability. These efforts align with the domestic push for energy efficiency and the global demand for advanced and sustainable wires and cable solutions.
Nurturing talent and capability through succession planning and leadership pipeline building, we aim to ensure continuity and adaptability in our operations, embedding customer-centricity into our core business processes and fostering a collective collaborative and inclusive culture will prepare us to address the evolving needs of our customers with complete support from a motivated team.
Growing ESG integration. The global emphasis on sustainability through initiatives like green energy transition underline the importance of ESG practices. By enhancing resource efficiency, adopting sustainable sourcing, promoting diversity and inclusion and increasing transparency, we will align with these priorities. These measures will position us as a responsible industry-leader, capable of driving value, while meeting the growing expectations of stakeholders worldwide.
Overall, through Project Spring, what we want to deliver to our stakeholders is the largest company in the sector growing above the industry growth rate over 2x of India’s GDP, real GDP and continuing to gain market-share. Two smaller segments of the company, international business and FMEG, growing its contribution to the company’s top-line, providing diversification away from the India capex story and adding to profitability.
Our business continuing to deliver industry-best margins and highest profitability, a business increasing its focus on R&D and innovation to continue to deliver best-in-class products ahead of its peers and across sectors to supplement its future growth potential, a business that will deliver an improvement in ROCE, a business that will continue to reward its shareholders with increasing dividend payouts, a business that is committed to sustainability, a business with a history of over-delivering on targets and a business laying the groundwork over the next five years to achieve its vision for 2047. This strategic project reflects our commitment to driving value-creation, leveraging macroeconomic trends and delivering sustainable and inclusive growth to all our stakeholders in the long-term.
Lastly, there is an update, which I would like to share with you. There has been some reorganization in the Board of Directors. On the Executive Directors side, Mr. Rakesh has stepped down as an Executive Director and Mr. Vijay Pande has been elevated to the Board as an Executive Director. Of course, subject to the approval of the members through a postal.
On the Independent Director side, I’m very pleased to announce that Mr. Sumit Malhotra has joined the Board as an Independent Director with effective from January 22, 2025. Mr. Sumit Malothra comes with over 31 years of professional experience heading many large companies. So now the Board will comprise of 11 Directors, 6 independent and 5 Executive Directors. That was the update for the quarter.
Thank you, and we are now open for questions.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question comes from the line of Ravi Swaminathan with Avendus Spark. Please go-ahead.
Ravi Swaminathan
Hi, sir. Congrats on a good set of numbers and thanks a lot for taking the question. My first question is with respect to the demand for cable. We know that over the past four years, there has been strong demand for cables driven by the federal government spends. But if you see the past one, two quarters, there has been some amount of softness in terms of federal governments. And there’s not much of clarity on whether that will go up significantly over the next few quarters. Is given that this kind of scenario, how do you see the overall industry growing? Do you see any signs of inquiries coming off, if you can give how it is likely to be over the next six to 12 months?
Chirayu Upadhyaya
Sure. Thank you so much, Ravi. So on the demand environment, it continues to be healthy. You are right that over the past two to 3/4, at least from the government side, the public capex has seen a bit of a slowdown, but that is something which had a reason. The general elections were on and that is where you normally see in an election year that the capex slows down. But we don’t expect this to be a continuous phenomenon.
We do believe that the current government, they are focused on the long-term growth of the company and that is very much visible from their vision of making India an advanced nation by 2047. So while there might be some form of slowdown here and there for a quarter, we believe that the long-term growth avenues are there and that is where we are also positioning ourselves to make sure that we make the maximum of this opportunity.
As we have released within our guidance, we are — we are gearing up to do capex of between INR600 billion to INR80 billion — INR60 billion to INR80 billion over the next five years. As you are aware, generally, we make an asset turn of over 4x to 5x on the capex. So that will give you an idea in terms of what is the kind of demand that we believe will be coming up over the next five years.
As we have also said that we expect to grow over 1.5% of the market growth. While the Indian GDP has grown fantastically over the past three to four years and going ahead is expected to grow anywhere between 6.5% to 7%. But given that and seeing the historical growth rate of these industry, we believe the industry will continue to grow at 1.5x to 2x of real GDP. I’m just putting a few numbers over here. For example, let’s say, the India GDP grows at 6.5%. That means the industry growth will be somewhere between 10% to 13%. We expect to grow at 1.5% of that growth. That means our growth will be somewhere between 15% to 20%. So that is in case of a 6.5% of real GDP growth.
If the GDP growth is at 7%, that means the industry growth is expected to somewhere be somewhere between 10.5% to 14%. And again, our growth is expected to be somewhere between 16% to 20% 21%, right? So that’s the kind of demand environment we believe will exist over the next five years. And we are not very much concerned of what happens in-between any couple of quarters here and okay.
Ravi Swaminathan
Okay. And with respect to the wires business, so any commentary on how the end-market real estate-led demand is? So essentially in this quarter you had mentioned there has been a bit of destocking from dealer side, some inventory levels being high. But say assume that it normalizes, how is the secondary sale demand is so the news to the real-estate time limit consumer, how is that panning operating and all that.
Chirayu Upadhyaya
So Ravi, the fundamental demand is very strong. While the slowdown that we witnessed in this quarter was one-off and we’ve tried to explain it in the presentation. What happened during the end of previous quarter was that there was a sharp up movement in commodity prices, which led to the distributors stocking up on product. As a result of which, the industry saw a huge growth in the previous quarter.
We ourselves had witnessed almost 40% of top-line growth for in the previous quarter. Now that translated into the channel having higher inventory at the beginning of this quarter. Plus, if you look at the overall trend of copper during the quarter, it was continuously in a downward movement and in fact, during November, in a period of about four, five days, it actually crashed by almost 9%. So as a result of this, both of this combined, the wires are offtake by the distributors, it was slow.
But again, as I mentioned, this was something which was led because of the commodity movement. There is no change as far as the fundamental demand is concerned. In fact, if you look at the scenario of what has happened post that, the channel inventory is now back to normal. The — the commodity is in an inflationary trend, and we expect that this quarter should again be good for the demand.
If you look at the macro numbers, which are also coming out, I was referring to a very recent report which came out from a property consultant. It mentioned that in Q3 and in the calendar year ’24, we actually crossed these launches and sales of the past 12 years. It was the highest-ever. Now all of this will definitely translate into demand for wires going ahead.
So in general, again, I mean, this was something which was a very one-off in this quarter. If you look at the nine months growth for us, we have grown the wires portfolio in mid to-high teens. So again, that is something which is very good in terms of demand and we expect that this level of momentum will continue in the next few years. So again, both cables and wires domestically, we are very positive in terms of the demand outlook.
Ravi Swaminathan
Understood. And last question with respect to the capex over the next five years, you had mentioned roughly around INR2,000 crore to INR8,000 crores. How much is the breakup between cables, wires.
Chirayu Upadhyaya
So Ravi, you can assume that most of it, a large part of it will be for the cables and wires business. For the FMEG business, we very recently expanded or set-up in-house manufacturing capacity. So as of now, the utilization rates over there anyways low. As and when required over the course of next five years, we will be expanding those capacities.
But you also need to put one thing in mind that FMEG business is not very capex intensive. The asset turns over there are quite high as compared to cables and wires. So if you are modeling a future next five years, then you can assume that most of the INR6,000 crores to INR8,000 crores that we’ll be putting up for the next five years will be for the cables and wires business.
Ravi Swaminathan
Okay. And between cables and wires, it will be proportion of the turnover.
Chirayu Upadhyaya
See, again, there is no specific breakup over there. As of now, for us, the utilization rates are somewhere between 75% to 80%, more for cables, a bit lower on the wires. As and when required, we can obviously put up capacities of both. And once what we can also do is utilize the capacities of — which are there for cables manufacturing to manufacture wires. So in that sense, there is a bit of a fungibility over there as well. Okay. So that is where-is like to the capex at.
Ravi Swaminathan
Understood. Thanks a lot.
Chirayu Upadhyaya
Thanks, Ravi.
Operator
Thank you. Next question comes from the line of Pulkit Patnik [Phonetic] with Goldman Sachs. Please go-ahead.
Unidentified Participant
Sir, thank, thank you for taking my questions. Before my question, definitely want to compliment you for ambitious, but a very realistic five-year plan. I mean, the last thing we all wanted was you gave a revenue number at a time when copper prices nobody knows about. So something to do with volume growth is something we definitely appreciate as a guidance.
Sir, my question is on export. In US, you had rejigged your distribution. Not sure if that is something that’s working, not working. Are you going ahead with it? Are you pulling back? Can you give a sense of what our US distribution strategy has led to and what is our plan given that you are talking about more than 10% of your contribution coming from export?
Chirayu Upadhyaya
Sure, Pulkit. So as far as exports to US are concerned, we’ve actually seen an improvement happening. As far as which model we will continue with, we are still — we are still in the midst of taking that decision. On the distribution side, we’ve seen some scale-up happening, but the institutional model is also something which has worked very well for us. So probably by the end of this quarter or post the end of this quarter, we’ll come back to you with a specific answer on which model we are continuing with.
But as far as our sales to US are concerned, we are very bullish on the entire opportunity over there. We definitely believe that going ahead, let’s say, over the next five years, US will be one of the top three geographies, where we will be exporting our products too. The model is something that we’ll take a call on over the course of next three to four months.
To give you more flavor on what it is playing out right now, in fact, in this quarter, almost one-third of the export that we’ve done is through the US geography or the North American geography. So in that sense, there is a good amount of traction even from that geography.
Ravi Swaminathan
Okay. This is helpful. Thank you.
Chirayu Upadhyaya
Thank you.
Operator
Thank you. Next question comes from the line of Mr. Achal Lohade with Nuvama Institutional Equities. Please go-ahead.
Achalkumar Lohade
Yeah. Good afternoon, team. Thank you for the opportunity. Just a qualitative reading. If you — if you read last quarter, you said the demand is robust. This quarter, we have said demand is healthy. Are you seeing any sign of weakness in any of the segments or demand centers according to you or where exceptionally high-growth in any particular segment, which is kind of slowing down?
Chirayu Upadhyaya
So Achal, definitely as of now or till now, as far as the cables demand is concerned, we haven’t seen an impact from the slowdown of public capex, which had been there in the first three, four months of this year. But you are correct in your assessment that if something doesn’t really pick-up or the public capex doesn’t pick-up materially going ahead, I mean that can obviously lead to some form of impact for this industry in the next Q1 or Q2. So that risk is something that obviously the industry runs at.
But we are quite hopeful that going ahead in three months of this financial year as well as going ahead, the government will continue to pump in money as far as the capex or infrastructure growth is concerned. And in that sense, probably that will balance out the growth potential for Q1 and Q2 of next year. So it’s something that is to be looked at, but nothing which is worrying for us as far as the longer-term is concerned.
Achalkumar Lohade
Understood. The second question I had, you know is on the capacity addition by several players in the industry in cables and wires. So if you could throw some light in terms of your understanding about what kind of capex you’re seeing industry-wide and do you see a risk of overcapacity or just capacity being matching with the demand over next three, four years?
Chirayu Upadhyaya
So Aachal, as far as the demand is concerned, as we’ve mentioned in the commentary, there are multiple sectors which are expected to do very well over the course of next 5, 10 or years to come. And that is where we believe the industry growth will — rate will continue to be quite good, similar to what we have seen over the past three to four years.
In that sense, and if you look at the kind of players that exist in this business, there are four or five very large players which have almost 60%, 70% dominant market-share and then there are very small players. The larger players are the ones who have the capacity to invest in that business and probably continue to deliver on the kind of demand which is expected going ahead. Probably the smaller players will not be able to add as much of capacity to cater to that demand.
So in that sense, we do expect that since there is going to be continuous very robust demand expected going ahead, at least the larger players with the ammunition to add capacity, they’ll continue to add capacity. But we don’t expect to come in a scenario, where all of us or the top four or five of us are fighting for demand because the demand is expected to be ahead of where the capacity is coming up right now.
Over and above that, for all of us, exports is one big opportunity where there can be very good growth. And obviously, all of this capacity which is coming up will obviously be utilized for that as well. Over and above that, the wires demand is also picking-up, right, and expect it to grow over the course of next three to four years. So the capacity can be utilized for that as well.
So certainly, as of now, we are not thinking that we are in a position where there is overcapacity or even capacity matching the demand. As of now, the thought process is that the demand will exceed the capacity. And probably we’ll have to wait out and see what the other players or the industry does going ahead as far as the capacity additions are concerned.
As far as we are concerned, we’ve laid out our roadmap for the next five years. We are very bullish on the demand and we are going to do capex of INR6,000 crores to INR8,000 crores, something which we did over the past 10 years is something now we’ll replicate over the next five years. So that’s the kind of demand momentum we are expecting and gearing up for achieving as much as possible from the opportunity.
Achalkumar Lohade
That’s very helpful, Chirayu. Thank you. Just last question, if I may, with respect to the exports. Just to get a sense, in terms of the approvals, what is needed for US of the total, let’s say, the categories or the most relevant large categories there. Do we have the approvals already in-place or by when do you think — or let me ask in another fashion, you know what of the total addressable market in exports in US, how much are we already have the approval for?
Chirayu Upadhyaya
See, Achal, I’ll answer this in two-ways. One is, if you are looking at the total addressable market, the addressable market is a very large market and there are thousands of different types of SKUs of cables that can be exported. For us, exports is a strategic business wherein the goal for us is to improve on our margins. So probably we won’t be catering to all the thousands of SKUs, which are of which can be exported.
As far as the SKUs which are — which are the ones we are targeting and if we are specifically talking about US, we have almost all the approvals for all the type of SKUs that we want to export over there. So while obviously we’ll continue to work on whatever remaining approvals are left, but largely we have that addressable market that we wanted to cater to in US already covered up.
Achalkumar Lohade
And what would be that size of that addressable market of the total market? Would that be 60%, 70% or would that be 20%, 30%.
Chirayu Upadhyaya
Very difficult to put down that number as of now. Probably we can work that out and get back to you in terms of the addressable market for US.
Achalkumar Lohade
Sure, sir. Thank you so much. I’ll fall back in the queue for more questions. Thank you.
Chirayu Upadhyaya
Thank you, Achal.
Operator
Thank you. Next question comes from the line of Akshay Gatani [Phonetic] with UBS. Please go-ahead.
Unidentified Participant
Hey, hi. Thank you, sir for opportunity. So my question is, what are the all ongoing expansion projects which you’re undertaking? And when do you expect them to come online? And in addition to this, if you can give some more light on the EHV cable expansion project which we are undertaking?
Chirayu Upadhyaya
So as we have been mentioning over the past two to three calls, the expansion that we are doing across all the product categories, all types of cables, super cables, low tension cables, high-tension cables, cables which are used for exports, optical fiber cables expansion is something that we’ve done. We are putting up a plant for special-purpose cables. So all types of cables as well as wires. These capacities are largely fungible in nature. So of course, we can utilize it for any type of cables, whichever cable is deriving whatever higher demand at a particular point of time.
As far as the EHE cables capex is concerned, as we’ve been mentioning, the capex outlay for that plant is roughly INR6 billion to INR7 billion. The capex is on as per plan and we estimate that the plant will be commissioned by the end of FY ’26 and can potentially start contributing to the company’s top-line from FY ’27 onwards.
Unidentified Participant
Got it. And this EHV cable with INR6 bill 7 billion of outlay, what will be the revenue potential?
Chirayu Upadhyaya
So generally, I think the asset turns that we expect are close to about 4 times over there and obviously, but that the ramp-up will be gradual in major. It won’t be from first year itself.
Unidentified Participant
Got it. Thank you. Thank you, Chirayu/
Chirayu Upadhyaya
Thank you
Operator
Thank you. The next question comes from the line of Shrinidhi Karlekar with HSBC. Please go-ahead.
Shrinidhi Karlekar
Yeah, hi. Thank you for the opportunity. So sir, are you seeing tailwinds from the rising rooftop solar system adoption in India because of this government’s governments are you?
Chirayu Upadhyaya
Yes, Shrinidhi, definitely that is one of the area wherein we are seeing a lot of traction, especially over the past one year. We definitely have products which we cater to through that industry. We have sodar cables, which are supplied as well as we have solar inverters and panels, which are obviously supplied for the same.
And over the past two to 3/4, we’ve seen that business doing very well for us, continuously increasing its contribution as far as the FMEG segment is concerned. So that is something which we believe will continue to be a driver of growth for the FMEG segment going ahead as well. And we are at our end also are trying to are trying to add as many products or SKUs over there as far as our offering is concerned, so that we can obviously capitalize on this upcoming opportunity.
Shrinidhi Karlekar
Great. And relatedly, are you also getting — is there a cable intensive demand apart from FMEG products? Is it cable intensive or it’s more wire intensive?
Chirayu Upadhyaya
It requires cables, but the requirement of cables is not very materially different as far as the percentage is concerned. There are consequently, the requirement of switchgears is also there in adjacency to the requirement for the solar panels, inverters and cables. So it’s a — it’s a thing which derives demand for multiple products from our portfolio.
Shrinidhi Karlekar
And second one, sir, is related to this exchange-related costs that are there in the other income line, INR31 crore versus 40 [Phonetic] income. Would it be possible to elaborate that? What exactly is that and one should consider that as an operating line or it’s more of a treasury function?
Chirayu Upadhyaya
So Shrinidhi, it is linked to the MTM on foreign exchange, we had a loss this quarter of about INR31 odd crores. This was linked to the rapid or sharp depreciation of rupee that we witnessed in the previous quarter. As far as its accounting is concerned, if you look at the segmental EBIT margins that we published below the P&L, it is already up portion to the specific segments. When you look at the EBIT margin, the impact — the negative impact of it is already there within the EBIT margin.
Shrinidhi Karlekar
Right. So yeah, it’s consider it more like operating that way? Hello?
Chirayu Upadhyaya
Yes. Yeah, Shrinidhi.
Shrinidhi Karlekar
Yeah. And lastly on exports, the very strong growth rate that you saw in this quarter in your commentary of sustaining this growth momentum. Is it driven by US as of now, it’s driven more by non-US.
Chirayu Upadhyaya
So Shrinidhi, it’s across. As I mentioned, there are three or four geographies which contribute a lot as far as or majorly to our top-line. US is definitely one of them. Middle-East is something wherein we are seeing a lot of demand for cable. Europe, Australia are another large contributors. We are trying to also enter as many geographies or countries as possible in Asia. But as of now, its contribution is lower. But the other four geographies, all of them are generating very robust demand and all of them are increasingly contributing to the order book that we have on the exports business.
Shrinidhi Karlekar
Thank you for answering my question.
Chirayu Upadhyaya
Thank you, Shrinidhi.
Operator
Thank you. Next question comes from the line of Amit Mahawar with UBS. Please go-ahead.
Amit Mahawar
Yeah. Hi. Particularly on exports, you know, maybe our market-share in exports is largely around our market-share in the domestic market and please correct me if I’m wrong. And as a country, we have less than 2% market-share of global exports on cable from India. Do you think in the guidance that we’ve given of more than 10% contribution from exports. It is more close to, 18% 20% than 10%. Can you clarify?
And second question is, can you specify how much will be EHV scale within the guidance of the next four, five guidance that you’ve given? Thank you.
Chirayu Upadhyaya
Sure, Amit. So first referring to the exports question. See, exports demand is something which is obviously very large. We are putting up a specific plant just to cater to the exports demand. We obviously have already — have capacities to be able to cater to that demand. So going ahead, we definitely expect the exports growth rate to be faster than domestic growth rate.
But one also needs to keep this in mind that even the domestic cables and wires portfolio, it is expected to grow at a very good pace as in the example, as I had mentioned, depending on the real GTP grows, it can be anywhere between, let’s say, 15% to 20%. So that is — that has a big base and is going to be growing at a very fast pace.
Over and above that, the FMEG portfolio, there too, we are targeting to grow almost 2x of the industry growth rate. So that will also increase as far as the base is concerned. Other than that, even EPC, we have a very good order book currently and probably some more will come up from two other opportunities linked to BharatNet as well as from the EHV.
So the base itself is expected to grow at a very good pace and hence, while exports growth will definitely be faster than domestic growth, the percentage contribution increase can’t be at a very rapid pace. And that is where we’ve left it as saying that it will be greater than 10%. As far as capacity is concerned or opportunity is concerned, we have the ability to take it even closer to 20%, but we’ll have to see what are the other variables and how they play out.
Coming to the EHV part, we have obviously taken apart or contribution from the EHV to the overall top-line. But again, it is not something which is going to be very material as far as the overall cables and wire topline is concerned for FY ’30. We will — it will be possible for us to give you more clarity on that much closer to when the plant is about to be commissioned and then we have — ourselves have more clarity in terms of the demand momentum, as well as the order book over there. So probably we can come back to that — closer to the date of commissioning of the plant.
Amit Mahawar
Yeah. Good luck. Thank you.
Chirayu Upadhyaya
Thank you.
Operator
Thank you. A reminder to all the participant, please restrict yourself to one question. Next question comes from the line of Nikit with MO AMC [Phonetic]. Please go-ahead.
Unidentified Participant
Yeah. Thanks for the opportunity. I had just one question. One is, if the duty or the tariffs are being imposed on Mexico or Canada by United States and given the fact that Mexico is such a large exporter of wires and cables to US, do you think this will open a significant amount of opportunity for you and how are you guys looking at it?
Chirayu Upadhyaya
So Nikit, that is definitely something which we are also looking out at as far as the opportunity is concerned. As far as import duty on cables is concerned, import duty on Indian cables by US is in the range of 3% to 5%, whereas Mexico enjoys zero import duty as far as cables export to US is concerned. So if as per what the American President is saying and if he actually goes on implementing 25% import duty on Mexico, then the pricing differential between the cables that we are able to supply versus what Mexicans can supply. obviously, the pricing goes in favor of India and that can definitely lead to market share gains for players from India like us.
So obviously, that is something which can be a big needle mover and we — we are looking at that as and when that happens. But obviously, we’ll also have to see whether similar import duties are levered on India or not. I mean, in that sense, I mean it’s something, which is quite of an open area. Well, we can get more clarity on that over the course of next one to two months as and when things move ahead in that direction.
Unidentified Participant
Got it. Last question is, how are we embracing this e-beam technology of manufacturing. Do you think that’s likely to be a large moat or is it higher margin versus the traditional one? Or is it the export market would love to have more eating technology made wires and cables versus a traditional one? How does it work? If you can just give me some understanding that would be great.
Chirayu Upadhyaya
Sure, Nikit. So EBIM as a technology is something that we’ve been utilizing for over two decades now. Probably we were the pioneers of utilizing that our technology in India. We’ve been utilizing it for cables for a while now. Now specifically, if you look at the special-purpose cables that we manufacture for niche industries, you utilize the e-beam technology over there.
Recently, over the past couple of years, we have seen that the technology has also started being used for manufacturing of wires. While the market for that type of fires was obviously quite small, but it is going at — growing at a good pace because obviously the end-customer, they know that this quality wires are obviously superior to your normal wires and that is where the larger players, developers, etc., they are looking to embrace this technology wires.
At our end as well, we are gearing up to be — to supply those. We already have a product which are manufactured through ebeam technology. It has already been launched in the southern part of the country and incrementally being launched across the other three zones. We will also have one more product at a different price point again with the ebeam technology, which will be launched in the near-future. So definitely something which is — which can be a big — which can be additional generator as far as the growth is concerned on the wire side going ahead.
Unidentified Participant
Got it. And one final one, if I may squeeze in is, when you highlighted your export share will likely to improve to closer to 15% to 12% over a period of time. Why is the margin assumption still at 11% to 13%? Shouldn’t it be 13% to 15% range?
Chirayu Upadhyaya
So Nikit, we have always been saying that in the long-term, 11% to 13% of EBITDA margins is something which is sustainable in this business. In the near-term, maybe in the mid-term, depending on what is the product composition or the business composition, there are obviously possibilities that we will continue to operate at the hirings that we are operating right now.
But at this point of time, I wouldn’t want to commit that five years down the line, similar scenarios will exist. So if it exists, obviously, we will try and our endeavor will be to continue to over-deliver on that guidance. But as of now, the guidance will be to deliver 11% to 13% of EBITDA margins in the long-term.
Unidentified Participant
Perfect. Congratulations and best of luck. Thank you.
Chirayu Upadhyaya
Thanks, Nikit.
Operator
Thank you. Next question comes from the line of Praveen Sahay with Prabhudas Lilladher. Please go-ahead.
Praveen Sahay
Yeah. Hi, so my first question is related to the EPC business. And in the last four quarters, we had seen a good run-rate going on. So if you can give some more color on how is the order book, especially in this segment and also on the margin profile guidance going-forward in this segment.
Chirayu Upadhyaya
So Praveen, as I had mentioned, we have a robust order book over there. As at end of December, about INR48 billion is the open order book that we have to execute over the course of next two to three years. So roughly from that order book, you will see a similar run-rate that we’ve been generating over the past two to 3/4, consistently coming up over the next two to three years.
Over and above that, possibly as and when we start executing the order, that will start contributing a bit on the EPC top-line. Probably from FY ’27 onwards, when we have an EHV order and we are executing those orders as well, that will also contribute to the EPC. But as far as its contribution is concerned, we don’t expect the EPC to be a very large contributor to the overall company’s top-line. It will continue to be maybe high-single-digits.
And as far as the revenue guidance is concerned, as of now, while we are operating at, let’s say, 10%, 11% of margins, the long-term sustainable margin range for that business is somewhere in mid to-high single-digits. So that is where probably our business will converge to in the longer-term.
Praveen Sahay
Okay. And the next question is related to the FMEG because in the FMEG this quarter, you had grown and given the reasons for that as well. So the — especially in the lighting, which you had seen the value growth, is that also sustainable or is there some element of a seasonality also there in this quarter, which in the preceding quarters, we’re not able to see that or you were seeing this to be a — the normal run-rate for a quarter?
Chirayu Upadhyaya
So Praveen, on the lighting side, definitely Q3 had a positive impact in terms of the Diwali festival that we had during the beginning of the quarter and which obviously contributed in terms of enhanced sales. But over and about it, I don’t think that is the only factor. A lot of our business visited initiatives that we’ve taken in that business in terms of expansion to different geographies or tying up with more-and-more distributors, retailers are having incentive schemes for them. All of them are actually working out very well in our favor. And we do expect that this business will continue to do a good going ahead as well.
As far as growth percentage is concerned, of course, I mean, it will be very difficult to predict whether it will continue to deliver a very healthy volume growth or value growth continuously because pricing erosion is something which is still ongoing, while obviously the pace has lowered, but it’s still continuing, probably going ahead on the premium side of — premium SKUs of those products also is where the pricing erosion might take a place. So in that sense, there will be some form of impact because of that.
But as far as the demand-generation avenues are concerned, our initiatives are actually working out and we are quite a hopeful that business will continue to do well for us going ahead as well and continue to contribute to the overall FMEG growth for us.
Praveen Sahay
Thank you, Chirayu. Thanks.
Chirayu Upadhyaya
Thanks, Praveen.
Operator
Thank you. Next question comes from the line of Renu [Phonetic] with IIFL Securities. Please go-ahead.
Unidentified Participant
Yeah. Hi, good afternoon, team. Thanks for the opportunity. Most of my questions are done just on bookkeeping, if you can help on how was the broad mix of cables and wires in 3Q given that wires had seen some significant weakness. And for YTD, what was the volume growth across cables and wires? Thank you.
Chirayu Upadhyaya
So as far as the mix is concerned, I believe the mix of cables have obviously gone up and it is north of 75% between cables and wires now. Now as far as the volume growth for the year is concerned, the volume growth in cables is in double-digits and for wires is in single-digits. Overall, the cables and wires volume growth for the year — year-to-date is in the high double digit.
Unidentified Participant
Thank you. Thanks so much.
Chirayu Upadhyaya
Thank you.
Operator
Thank you. The last question comes from the line of Aniruddha Joshi with ICICI Securities. Please go-ahead.
Aniruddha Joshi
Yeah. Thanks for the opportunity. Most of the questions are answered. But just two things. Can you indicate the likely market-share that we are targeting in FMEG segment considering we are planning to grow at almost double the market rate? And also, in terms of the region-wide strategy, East, West, North South, which are the regions where we are looking at higher-growth rates or possibility of more market share gains?
And lastly, in terms of quick commerce, we don’t see much of presence of polycarbon quick commerce channels. So any outlook that you would like to indicate regarding this channel? Yeah, that’s it from my side. Thank you.
Chirayu Upadhyaya
Sure. So as far as FMEG business is concerned, as we’ve mentioned that we would target to grow ahead of the industry growth rate, somewhere between 1.5x to 2x of industry growth is something that we are targeting to grow at. Obviously, that will help us gain on-market share, but of course, that will be different for different products and that is where it was very difficult to say whether what percentage market share we will gain as far as the SMEG segment is concerned.
We — between the different product categories, we’ve already laid out which are the categories which we believe we should be targeting to grow its a contribution because of better profitability and all. In general, across all the product categories, we’ll continue to expand as far as the capacity is concerned, as far as the distribution is concerned and so on and so forth. Ultimately, as you’ve been mentioning, the ultimate goal for us is to be among the top three players across the product categories. So as far as the growth of market-share is concerned, we’ll have to work in all the product categories consistently across the years.
The — sorry, your second question was on…
Aniruddha Joshi
Quick commerce.
Chirayu Upadhyaya
As regions are concerned, see, as of now, the Western region is where we have the most presence. But of course, we are working on gaining our prominence in other regions as well. All the other regions, North, South, East probably is where we are doing a lot of initiatives in terms of distribution expansion or making our products available across more number of retail outlets, enhancing our product availability or different types of products catering to specific product categories as well.
And over and above that, the different type of GTM strategies are also being employed so as to make sure that for a particular or geography, if there is a particular type of GTM which works best, we employ those GTM strategies. So that is something which is in works and we are trying to improve the contribution of other geographies to the top-line as well.
As far as the e-commerce or is concerned, that is also a part of the GTM strategy which I was mentioning. As and wherein whatever geographies those GTM strategies are working well, we will obviously try to work and employ those strategies as well. Probably going ahead, maybe over the course of next few quarters, years, you’ll see us are availability becoming or improving much better across all the different types of our GTMs. Hope I have answered the questions.
Aniruddha Joshi
Yes, sure. Thank you.
Thank you.
Operator
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I would now like to hand the conference over to Mr. Gandharv Tongia for closing comments.
Gandharv Tongia
Thank you for your support in our previous transformation project, the project are now counting on your support for the next project — the project. Thank you for joining us today and wish you a great day ahead. Thank you. Bye-bye.
Operator
Thank you. On behalf of Polycab India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.