Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
POLYCAB INDIA LIMITED (NSE: POLYCAB) Q3 2026 Earnings Call dated Jan. 16, 2026
Corporate Participants:
Unidentified Speaker
Shashant Yadnick — Head Strategy
Niyant Maru — Chief Financial Officer
Analysts:
Sonali Salgaonkar — Analyst
Akshay Gattani — Analyst
Puneet Gulati — Analyst
Praveen Sahay — Analyst
Aniruddha Joshi — Analyst
Ravi Swaminathan — Analyst
Pulkit Patni — Analyst
Ashish Dair — Analyst
Umang Mehta — Analyst
Achal Lohade — Analyst
Vidit Trivedi — Analyst
Presentation:
Operator
Ladies and gentlemen, good evening and welcome to the Polycap India Limited Q3FY26 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Tanyant Maru, Chief Financial Officer, polycab India Limited.
Thank you. And over to you, sir.
Unidentified Speaker
Thank you. Good afternoon everyone and thank you for joining us today. I hope all of you are staying healthy and safe. I am Niyan Maru, CFO at Polycap India Limited. On today’s call, we will be discussing the Q3FY26 results which were approved by the Board of Directors earlier today. We will be referring to the earnings presentation, financial results and financial statements, all of which are available on the stock exchanges and on the Investor Edition section of our website. Joining me today from the management team are Shashant Yadnick, Head Strategy, Chirayu Upadhyay, Head Investor Relations.
Before we get into quarterly performance, I would like to share a very important update announced at the board meeting today. It gives me immense pleasure to inform you that the Board of Directors at its meeting held today has approved the redesignation of Mr. Bharat Jai Singhani and Mr. Nikhil Jai Singhrani from Executive Directors to Joint Managing Directors of the company with immediate effect, subject to approval of the shareholders. Over the years, Bharat and Nikhil have played an integral role in shaping the company’s growth trajectory, strengthening the market leadership and building a strong foundation for our long term value creation.
Their deep understanding of the business, strategic clarity and hands on leadership have been key contributors to the company’s success. I am confident that in their enhanced role as Joint Managing Director, they will continue to provide strong leadership and guidance and work closely with the Board and the management team to steer the company towards sustained growth and scale. Newer milestones in the years ahead. With that, let me now take you through the macro environment. On Macro environment.
The year 2025 marks the pivotal phase for the global economy defined by shifting trade dynamics and heightened geopolitical and tariff related uncertainties. Elevated US tariffs disrupted the established supply chain and moderated global growth even as labour markets remained resilient and inflationary pressures eased across the major economy. Against this backdrop, the global economy is expected to grow at around 3.2% in 2025, reflecting a period of stabilization amid persistent trade tensions.
Overall, the Global environment in 2025 has been characterized by steady but uneven growth, improving inflation dynamics and cautious monetary easing across regions. India continues to stand out as a clear outperformer in this global landscape, demonstrating remarkable resilience and adaptability. With Q2FY26 GDP growth at 8.2%, India continues to be the fastest growing major economy, underscoring the strength of its internal growth engines. In November 2025, India overtook Japan to emerge as the fourth largest economy globally reaching a GDP of USD 4.19 trillion.
Domestic consumption has witnessed a notable revival following last year’s direct and indirect cuts. Credit growth has tended meaningfully with total credit uptake reaching INR 11 trillion till November 25 compared to 9.5 trillion last year. Two wheeler sales also increased by 18.1% year on year over the September November period while passenger vehicle sales rose by 7.3% during the same time frame, reflecting improving confidence among consumers and businesses alike. Encouragingly, this recovery has occurred alongside a continued moderation in inflation.
Headline inflation has trended lower, led by easing food prices, while lower global energy prices have provided additional relief. Despite currency depreciation during the fiscal year, the pass through to inflation has remained limited. Poor inflation across both goods and services has stayed relatively benign. In this favorable macro backdrop, the RBI delivered a 25 basis point policy rate cut, revising its growth forecast upward to 7.3% for the year and lowering its inflation projection to 2% for the next fiscal year.
First half inflation expectations have been revised downwards to 4% compared to 4.5% earlier. The rare combination of stronger growth and softer inflation enabled the Monetary Policy Committee to proceed with the rate cut, taking cumulative easing to 125 basis points during the calendar year. Investment activity has also gathered momentum. Rising capacity utilization, strong investment announcements and improving credit offtake points to a broad based recovery in economic activity and increasing job creation.
The real estate sector remains healthy with launches and sales across the top seven cities closely tracking the previous decade’s highs. The affordable housing segment is also witnessing renewed momentum supported by lower borrowing costs and rising household incomes. At the same time, government capital expenditure has accelerated meaningfully with approximately 59% of the FY26 CAPEX outlay already utilized by November 2025, a 28% year on year increase. Overall, we are witnessing signs of recovery in consumption and this improving demand environment is expected to translate into a revival in private capex complemented by sustained public investment providing strong confidence in India’s growth outlook.
I will now hand over to Shashank to take you through the financial performance for the quarter and the year.
Shashant Yadnick — Head Strategy
Thank you Nian. Let me now take you through slide 4 of the earnings presentation for the quarter ended 31 December 2025. We are pleased to report that our company delivered 46% year on year growth in consolidated revenues driven by strong execution in the wire and cable segment and healthy growth in the FMEG business. Our EBITDA for the quarter grew by 34% year on year with EBITDA margins at 12.7%. Excluding the one off impact of rupees 219 million on account of gratuity provisioning due to the implementation of the new Labor Code, the EBITDA margins would have been approximately 13% at the PAT level.
The company delivered its highest ever quarter three PAT at Rs 6.3 billion reflecting 36% year on year growth. PAT margins stood at 8.3% for the quarter. Finance costs came in at rupees 687 million while other income stood at Rs 505 million. A detailed breakdown of these line items is available on slide 17 of the presentation. We continue to maintain a strong balance sheet, closing the quarter with a net cash position of rupees 30.3 billion on working capital front same as last quarter. Inventory days continue to be higher as we built up inventory in an anticipation of strong demand in Quarter 4 FY26 and correspondingly given the use of letters of credit for raw material procurement.
Payable days were also higher resulting in the working capital cycle to be at 27 days at the end of quarter three FY26. We expect this to normalize to our long term steady range of 50 to 55 days in the coming quarters. Capital expenditure for the quarter was rupees 3.4 billion taking the nine month FY26 total to 10.9 billion. And this is in line with our Project Spring guidance of investing rupees 12 to 16 billion annually through FY30 on a nine month basis. I am proud to share that nine month FY26 revenues.
EBITDA and PAT are the highest ever in the company’s history for any nine month period. Revenues grew 30% year on year, crossing the rupees 200 billion milestone. EBITDA grew 47% year on year with margins strong at 14.2%. PAT grew 47% year on year with PAT margins of 9.6%. We now move to slide 6. The wires and cables business delivered very Strong performance recording 53% year on year Revenue growth during the quarter this growth was led by domestic wire and cable business which posted an exceptional 59% year on year growth supported by robust demand conditions and sustained commodity price inflation in volume.
The domestic wiring cable business recorded nearly 40% growth reflecting healthy underlying demand. This strong performance underscores a a further strengthening of our market position with continued market share gains in the domestic market during the quarter. Execution excellence under Project Spring remains a key enabler driving superior market execution, improved relationships with our channel partners and consistent outperformance. During the quarter, wirn’s growth outperformed cables driven by pre stocking by channel in partnership amid elevated copper prices within the cable segment, institutional sales growth outpaced the channel sales reflecting strong traction in project led demand.
Looking at the broader environment, demand remains robust across key sectors. Government capex surged nearly 28.2% year on year in the first eight months of FY26, reaching 6.6 trillion rupees versus 5.1 trillion last year, also 12.4% higher than in the eight month period in FY24. Additionally, the government of India released loan of rupees 1.25 trillion to states for capital expenditure during the same period. The private CAPEX cycle in India is showing signs of recovery aided by the monetary policy support and the stimulative impact of CST rate cuts on consumption, laying the foundation for sustained investment growth.
The real estate market remains strong following last year’s record sales and launches, a trend that should continue to support wire demand in the coming years. Our international business maintained its steady momentum, recording a 5% year on year growth during the quarter despite a high pace and contributing 6% to the consolidated revenues. Backed by a healthy order book, we remain confident that this growth trajectory will continue in the coming quarters segment. Profitability was impacted during the quarter due to multiple factors, primarily on account of continued commodity price inflation and depreciation of the Indian rupee.
Between September 2025 and December 2025, copper and aluminium prices in rupee terms increased sequentially by approximately 21% and 11% respectively, which represents an unusually sharp escalation over a short period of time. In order to avoid demand disruption arising from elevated input costs, the company took a strategic decision to pass on the increase in raw material prices in a staggered manner. While this approach resulted in near term margin pressure at the company level, it enabled us to protect volumes, gain market share and further strengthen relationships with our channel partners.
Moving on to slide 8 for an update on the FMEG business. The FMEG segment sustained its impressive growth Momentum, delivering a 17% year on year increase in quarter three FY26 and consistently outperforming the industry in line with our product screen growth aspirations. Within the segment, the solar business has been a standout performer, growing more than 2x compared to the same quarter last year driven by strong uptake under central and state rooftop solar incentive scheme. With favorable quality support and strong demand visibility, we expect this momentum to continue in the coming quarters.
Other product categories delivered steady in line performance, reinforcing the segment’s balanced and resilient portfolio. Importantly, the FMEG segment remained profitable for the fourth consecutive quarter even while strategically ramping up our ANP investments to strengthen brand presence and drive long term growth. As we continue to scale, we expect profitability to expand further reflecting the leverage in our business model. Looking ahead, we are confident in the long term potential of the SMEG segment and remain on track to achieve our Project spring targets of 1.5 to 2x industry growth and EBITDA margins in the range of 8 to 10% by FY30, positioning the business for sustained growth and value creation.
Moving on to slide 10 which provides an update on our EPC business. During quarter three FY26, EPC revenues grew by 4% year on year reaching Rupees 4069 million. This quarter we commenced execution of our existing orders under RFNET scheme which is expected to generate rupees 4.5 billion over the next three years for project execution and an additional 3.5 billion world 10 years for project. ONM segment profitability stood at Rs. 272 million translating to a margin of 6.7%. Looking ahead, the annual sustainable operating margin is expected to remain in the high single digits over mid to long term.
That was the update for the quarter. Thank you and we are now open for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the 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 your question. Ladies and gentlemen, we will wait for a moment while the question comes in. The first question is from the line of Sonali Saugankar from jp. Please go ahead.
Sonali Salgaonkar
Thank you for the opportunity and congratulations on a strong revenue growth. I have three questions. Firstly, strong revenue growth in the CNW segment. Would it be able to quantify what is the volume growth for this quarter year on year?
Shashant Yadnick
Yeah, thank you for the question. And you wanted to understand the volume growth, right?
Sonali Salgaonkar
Yes, in CNW cables and myo.
Shashant Yadnick
For both cables and wires our volume growth are about 40%.
Sonali Salgaonkar
Great. And I think in the presentation you said. Could you say that again sir?
Shashant Yadnick
I’m saying our domestic cable and wire business grew at 40% volume this quarter.
Sonali Salgaonkar
Right. And any more details you would like to share as to which end user industries contributed highest? Because 40% is a very significantly high number.
Shashant Yadnick
See there is sustained momentum in both government and private capex that we have seen and in case of real estate has picked up really well internally. Also due to the commodity price rise it is very obvious that channel partners usually tend to stock especially in case of wire that has also led and contributed to the higher surge in top line.
Sonali Salgaonkar
Understood. My second question is on the EBITDA margin. We understand the reasons that you have outlined in your presentation as to why the POQ drop was there in the ebitda margin. The 23 follow up question. Firstly, such a high volume growth would increasingly result in good operating leverage rate. So that is one. Secondly, I think you did take a price hike of about 6% year on year. So could you help us understand what exactly led to this fall of EBITDA margin both year on year and top.
Shashant Yadnick
So suprani, I’ll try and answer that. There are multiple factors here. Okay. The major reason here is the rise in commodity prices. Now if you look at year on year increase, the copper has risen almost 50% and aluminum almost 25%. Right. And in this quarter itself the 22% inflation has happened in copper price compared to previous quarter. Now all of it to be passed on. It’s a strategic call for management to pass it on in a staggered manner. So we’ve been revising our prices but not all of it has been passed off.
So it takes time to pass on these rise in input cost prices. That is the first thing. Sonali Asank mentioned. When the copper prices rises so high and so suddenly, you have to take a conscious call of how you want to pass on. Because if you look at this specific financial year from April till December, the copper prices have risen by 35% and this is including the rupee depreciation. And similarly if you look at aluminium, aluminium has risen by 27%. Now out of that, out of the 35% of copper rise, 21% has happened within this quarter itself and 11% of that has happened in December itself.
So we’ve been consistently passing on that. Copper pricing inflation to the end customers month on month. But we have taken a conscious call that such high 35% passing of inflation can’t be done every month and hence we’re doing it in a bit of a staggered manner. We’ve been doing it, we’ve taken a bit of a price hike towards the end of the quarter. We have again taken a bit of a price hike towards the beginning of this quarter as well. But still we haven’t passed on the complete price hike or the commodity pricing inflation.
Hence if you look at the financial statement, you realize that most of the decline in the EBITDA margins have been on the gross margin level. You are correct in mentioning that such high top line growth will result into operating leverage which is very much visible. If you look at everything below the gross margin, we have realized a lot of improvement as far as our operating leverage and everything is concerned. But here this is a conscious call. What we have taken. One will also need to appreciate that what we were able to achieve through this staggered passing on.
See if you look at our performance in this year, our cables and wires segment has grown 35% year on year. And that too on a base wherein we are operating at 2x of the industry or the second largest tier. Also this has resulted that the staggered. Passing on of copper prices to our end customers have also resulted in the improvement of loyalty of those customers with us. Because we don’t have to take a brunt of reduced demand, neither of lower margins. We’ll definitely be passing on whatever commercial inflation will be coming off gradually.
But this is something that we have taken as a check before. Since you’ve been following this sector for many years, you will recall that even in FY22 similar commodity price sensations were there. Copper had gone up by 40% whereas aluminum had gone up by almost 25, 27%. Even at that point of time, Polycas. Margins had taken a hit for a quarter or two, but then we had gradually recovered back those margins. So we believe that a pretty much. Similar is something that will play out that can be marginal impact for a quarter or two.
But if you look at more of a longer term view, we should be able to recover some of our margins back.
Sonali Salgaonkar
Very clear. Suraye, thank you for this detailed answer. May I just ask what is the quantum of cell size that you have taken at the start of this quarter you mentioned before?
Shashant Yadnick
Can you please repeat that question once?
Sonali Salgaonkar
Price hikes that you have taken at. The start of this quarter.
Shashant Yadnick
Price hikes that we would have taken within this quarter will be almost 75 to 80% of whatever commodity inflation was there.
Sonali Salgaonkar
Understand? Got it. And just one last question on the Exports while there has not been any growth. But what, how do you foresee the exports to shape up in the coming quarters? That’s it from my side. Thank you.
Shashant Yadnick
So Somali on exports. In fact majority of the revenue that we’ve accrued this quarter has come from other geographies other than US So and in fact when US comes in it will further add to the revenues. In fact we’ve done better in Middle East, Latin America. So all of these geographies are contributing significantly and there is a healthy order book. So I think which you will see in the further quarters it will translate into revenues for the segment.
Sonali Salgaonkar
Any reason why the US is weak this quarter? Is it tariff related?
Shashant Yadnick
Of course it is tariff related and I think this is the global overhang which I believe is impacting everybody, not just in India but worldwide. So we are awaiting the final resolution of this matter.
Sonali Salgaonkar
Got it. Thank you and all the best.
Operator
Thank you. The next question is from the line of Akshay Ghatani from ubs. Please go ahead.
Akshay Gattani
Hi sir, thank you for the opportunity and congratulations on the strong set of numbers. So you highlighted 40% growth, volume growth, domestic volume growth. In your sense, what would have been industry growth and where is your market share trending now? Any qualitative color will also be helpful.
Shashant Yadnick
It’s very difficult to give market share perspective today when we are the first ones in the industry to come up with the results. So I think others are still going to come out. So then you will get a better estimate. And in terms of, you know, I think volume growth, we’ve also seen very strong volume growth, volume growth and value growth. But we are yet to comment on the market. We cannot comment on the market till the others come up with results.
Akshay Gattani
Got it. And second question sir, like you highlighted strategically have taken, you have not passed through all commodity inflation to protect the demand. Do you think if the way copper and aluminium are moving up, if this continue there could be some demand curtailment. Some demand postman, temporary demand postponement.
Shashant Yadnick
It’s very difficult to comment on the commodity price. I think they are also reviewing, reading every various reports and everybody has their own view. But on the demand side we are very confident that the growth momentum is going to continue. We have seen a good amount of movement in government private capex, real estate. All segments are pumping in money into power, utilities and infrastructure. I think from that perspective, I don’t think demand is going to be a challenge for us.
Akshay Gattani
Got it. That’s all from me. Thank you.
Operator
Thank you. The next question is from the line of Puneet Gulati from hsbc. Please go ahead.
Puneet Gulati
Yeah, thank you for the opportunity. Can you also give some sense of breakup between what are the difference in the performance between wires and cables? Separately.
Shashant Yadnick
Our mix of cable and wire is in the ratio of 70:30. Okay. But in this specific quarter we’ve seen wire growth outpacing the cable growth. Okay. So you can add some percentage points there. And of course in the value value case, you will see that since copper commodity price has increased significantly, the wire contribution has been higher.
Puneet Gulati
Understood. And in terms of price hike, can you also divide it in how much price hike you took in the previous quarter? What did you do in the current quarter which is starting January and how much do you still need to take to make up for the price inflation? Commodity inflation.
Shashant Yadnick
Coming as I mentioned to Sonali, we’ve taken almost 75 to 80% of the commodity inflation which was there during the quarter already within the quarter. The remaining will happen during this quarter.
Puneet Gulati
But the January one which you said that you’ve already taken or yet to. Take,
Shashant Yadnick
You’ve taken partially and we will. Further pass on further increase in prices gradually.
Puneet Gulati
Understood, that’s helpful. And secondly, if you can also give some color on what you see on your distributor side, how much of this demand would be just restocking and how much would be end consumer driven?
Shashant Yadnick
Praveen see largely, as Shashank had mentioned, largely see restocking happening mostly on wire rather than cable. Generally when our distributors talk inventory, they maintain roughly 30 days worth of inventory. At the end of the previous quarter or beginning of this quarter, the channel inventory was in the percentage of around 40 to 45 days. So around 10, 15 days of additional inventory was there. But of course the demand is pretty. Strong even till date in this quarter we have seen very good sales happening and there is definitely very good secondary and tertiary sales which are also happening.
So the demand since it’s very strong, will definitely key realization of all this sales that we have seen. If you recall, in the last three to four quarters every quarter we’ve seen similar pre stocking happening. But commodity prices have been continuously going up. Even then every successive quarter we see improvement in terms of growth rate. So that means the fundamental demand itself is so strong. So I don’t think there’s any reason to worry. Anyways, we are coming into Q4 where execution are at its peak and everybody would want to achieve a really target, be it government or be it private.
Right. So Q4 should be another good quarter for us and we are quite Optimistic on
Puneet Gulati
It. Excellent. Just lastly if you can also give some sense of how does your capacity utilization stack up currently.
Shashant Yadnick
So our capacity utilization in the quarter stood at somewhere around early 80s. Okay. And you can. Yeah, I think that’s a fair estimate to take.
Puneet Gulati
Okay, that’s very helpful. Thank you so much and all the best.
Operator
Thank you. The next question is from the line of Praveen Saha from PL Capital. Please go ahead.
Praveen Sahay
Yeah, hi. Thank you. Yeah, hi. Thank you for opportunity. My first question is related to the institution sales. As you had highlighted the institutional sales. As outperform the B2C. So can you quantify in that in terms of percentage,
Shashant Yadnick
I mean generally our mix of distribution versus institution is around 90 to 10. But this time around institutional sales have grown faster than our distribution sales that would have improved by about couple of hundred basis points.
Praveen Sahay
Okay. And also you know as you highlighted. About this institution there is a the. Capex led private or a government and the real estate both has done well. So also if you can give some. More color on that the how is the real estate contribution for the wire which has also outperformed.
Shashant Yadnick
I think if I got your question correctly, you’re asking about the real estate market. So see we’ve studied some data wherein at least in top 8 cities the amount of launches in terms of number of units and the amount of sales that has happened has been pretty robust in 2024 and the same momentum is continuing in 2025. We expect that same growth momentum to continue in the coming quarters as well. So. So why is demand is not a problem?
Aniruddha Joshi
To add to Shashank’s point, we
Shashant Yadnick
Have been talking since couple of quarters now that while we have seen majority of the positive demand on the premium side, recent data also suggests that there is a pickup happening even on the affordable side. So that is something wherein we have been targeting to improve our market share since last two to three years. You are aware that we had introduced Atida brand which was to compete with the unorganized players in tier three to five cities. And we have seen very good growth happening in tier 33 to 5 which is through our launches more and more that as well even in tier 1 tier 2 cities our focus has been more on class 2 wires wherein we are definitely seeing a lot of market share gains for us.
So both of them are working. Even the industry growth is picking up pace and we are also seeing a lot of market share gains for us because of initiatives that we’re taking with new project.
Praveen Sahay
So just lastly if you can give on the screen.
Operator
Mr. Praveen, can you please use the handset mode and speak as they’re not able to hear you?
Praveen Sahay
Yeah, I’m in handset mode. Am I audible?
Operator
Yes.
Praveen Sahay
Yeah, yeah. So can you give us some color. On the volume growth for the wire and the cable? Out of a volume growth in overall. How much is the wire, how is cable?
Shashant Yadnick
So Praveen, I think you have a. Very clear distinction between top line growth as well as volume growth. For us in the domestic circuit the volume growth has been around 40%. Both cables and wires have grown at pretty much similar pace in terms of volume in case of revenue as Shashank had mentioned, since wires are copper based and copper has been more inflation. For US wires, growth was at a revenue level at 70% whereas for cables the growth was at around 50%.
Praveen Sahay
Thank you. Thank you so much. That’s helpful.
Shashant Yadnick
Thanks.
Operator
Thank you. The next question is from the line of Ravi Swaminathan from Evinders Park. Please go ahead.
Ravi Swaminathan
Hi sir, thanks for taking my question. And congrats on a good set of numbers. I have only one question. This is regarding the cable segment. If you can call out the top. Three or four, five sectors which are. Driving the sales growth, I think power TND would be one of the sizable. Sectors which would be driving the growth. Or what would be the approximate contribution of that? And yeah, so all these segments, how. They are growing, which is growing faster. Which is going relatively slower. If you can give a broad contour.
Shashant Yadnick
See major consumption, you know, if you go to go to product category level in cables, happens in power cables, control cables which largely go into power infrastructure. Okay, Energy utility infrastructure, that’s a primary demand sector. And followed by that there is strong growth that we are seeing in industry, industry segment also. And if you look other, if you look at all verticals, you know, besides the sunrise, but if you look at key verticals, manufacturing, utility, government, all of them have picked up good amount of demand.
Ravi Swaminathan
Okay, and the contribution of power TND. In the overall cable demand, how much will it be? Any sense. The contribution of poverty in the, in the overall demand for cables, how much will it be?
Shashant Yadnick
Almost 30%.
Ravi Swaminathan
Okay. And the second largest segment would be up after that.
Shashant Yadnick
Then it comes MV and lv, medium voltage and low voltage cables.
Ravi Swaminathan
Okay, and these would go into which sector?
Shashant Yadnick
Sorry, come again?
Ravi Swaminathan
These would go into which, which in end using sector.
Shashant Yadnick
Your normal power cables which you have your LV and they go across the different sectors be it power utilities or your normal institutional infra. Everywhere the power cables are used so they will be the maximum in terms of the variant within the industry. At an industry level, around 40 to 45% of the cables sold will be low voltage, medium voltage cable. Then that will be followed by control cable and what we call flexible cables. Now both of this are used in separate set of industries. Flexible cables are something which we used used in our day to day life.
For example cables which are your for your laptop or your tv, AC, refrigerators, those are called flexible. They are. And then you have control cable cables where you need to have a signal, a pass on where you can control the outcome, that kind of cables. So again these are used across different sectors. Control cables at an industry level the. Salience will be somewhere around 15 to 20% whereas for flexible cable the tailings will be between 10 to 15%.
Ravi Swaminathan
Understood? Yeah. Thanks a lot.
Shashant Yadnick
Thanks.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants in the conference call, we request you to kindly limit your questions to per participant. If you have a follow up question, please rejoin the queue. Again, the next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead.
Pulkit Patni
So, thank you for taking my questions. Just a couple. Firstly, you mentioned that copper price increase had been unprecedented and which is why you took the active call of passing it on in a deferred way. Is it also true that customer in that case would have had significant sort of restocking, which means probably what typically plays out for a few days could have played out for maybe a couple of fortnights, that is in case copper prices don’t move much. Our Q4 numbers may be slightly negatively impacted because of this massive restocking.
Is that a fair assumption?
Shashant Yadnick
So I think partially this has been addressed earlier by Chirayu. So largely the stocking has happened in case of wire. Usually it happens in case of wires, cables, there’s usually no stocking. And the real estate segment we continue to see an uptick. Also if you see previously I think you mentioned once this event has also happened past in FY22 when again we saw that after 1/4 the following quarters continue to show growth momentum. So we don’t see. We don’t believe that there’s going to be anything different this time.
Pulkit Patni
Okay, so it’s not that there’s unusual stocking that has happened despite copper price increase. That’s how I should read that answer.
Shashant Yadnick
Yes, as I mentioned there is about a bit of an elevated inventory as far as vias is concerned. But since the demand itself is pretty strong. We are quite confident that there won’t be any slowdown in terms of momentum in Q4. Even in case of cables. As I had mentioned, Q4 is generally the peak when we see the demand for cables and from across different industries and hence we are quite sure of absorption of whatever new demand is coming in. Commodity prices are obviously something which we can’t control and we wouldn’t know how.
It will play out in Q4. To the best of our ability, we’ll try and pass on whatever price hikes come across and to the end customers in such a way that the demand is not impacted.
Pulkit Patni
Okay, okay, point taken. Secondly, on your ad spend, which is considerably higher and almost three times of what your quarterly ad spends are, is this the new run rate? Is this some new thought process in terms of gaining market share? How should we look at this from outer year perspective?
Shashant Yadnick
You need to appreciate that this is the time of the year when there’s more festive period, the second half of the year. And this is the time when we also did invest significantly in brand building. We participated with a few celebrities and stuff like that. So that’s a strategic call and it’s not a new baseline, but I think yes, it’s your conscious call. It’s a strategic investment into np. And that is also translated. Not entirely, but I’m sure it will translate further into our growth also. Prunkit, as far as run rate is.
Concerned, see we have given a guidance that we want to spend around 3 to 5% of B2C top end every year on A and B. Even with this increased spend of this quarter, we are hardly at around 1.5%. So every year going ahead you can definitely an improvement or increase in our investments towards anc. But it will be difficult to say that this will be every year. Sorry, every quarter. Because first half of this year we didn’t spend material on ANC. This quarter we did spend Q4 is against a quarter where you start doing more amp because you’re in pre summer season and you want to do more spends for your friends.
So there are those quarterly variations which happen. Second half of the year is always heavier as far as investments on AMP is concerned. But on a yearly level going ahead as we’ve been guiding, we want to take AMP spend up to 3 to 5% of B2C token and that is something that we’ll plan to do gradually.
Pulkit Patni
Okay, thank you so much for your answers.
Shashant Yadnick
Thankfully.
Operator
Thank you. The next question is from the line of Kur Pandya from ICICI Prudential Life Insurance Co. Ltd. Please go ahead.
Niyant Maru
Thank you for the opportunity. First question is on the profitability side. Just want to understand so Q1. Q. Generally Q4 is bigger than Q3. So in that backdrop should sequentially margin be better than Q3 since we’ll have better operating leverage?
Shashant Yadnick
Yes, I mean it should definitely get better.
Niyant Maru
Okay, so just basically the back
Shashant Yadnick
In. Quarter four as far as the gross margin level is concerned, as I had initially mentioned, to the best of our ability, we will try and pass on whatever price hike if there are required to be done to the end customer. We are not sure whether copper prices will continue to move up or go down. Whatever it might be the case, we’ll try and pass on whatever it is to the end customer as much as possible.
Niyant Maru
Understood? Understood. And just one more follow up on the profitability side. So generally we have maintained profitability margin in a particular range 12 to 14% for cables and wires. And just to reaffirm our profitability is linked to percentage margins. Right. And not some specific rupees part done it, something like that. So copper inflation in general helps in maintaining those percentage margins.
Shashant Yadnick
Yeah, that’s right. Your understanding is correct. And in fact I’ll just add to that to refer to our Project Spring guidance, we’ve given a long term guidance of 11 to 13%. But in the near term. Yes, what you mentioned is correct.
Niyant Maru
Understood. But basically it is percentage margin that that is internalized and not rupees per ton kind of metrics.
Shashant Yadnick
Yeah, yeah. It’s not rupees per ton, it’s percentage analyzed.
Niyant Maru
Understood. Noted sir. Thanks a lot and all the best.
Shashant Yadnick
Thank you.
Operator
Thank you. The next question is from the line of Ashish Dair from Macware India. Please go ahead.
Ashish Dair
Hi sir. Good evening. So my first question is on again cable and wire margins. So one is, you know, the one off employee cost, is it booked in any specific segment or where is it in the segmental results?
Shashant Yadnick
No, it’s not in specifics across.
Ashish Dair
Okay, okay. And this is one off, right? This is not recurring from next quarter onwards. Because this is like one time for retireals or. Okay, okay.
Shashant Yadnick
And secondly
Ashish Dair
Like. And secondly, you know why like in the presentation we have listed 300bps impact on margins due to unfavorable product mix. And also that is largely higher institutional sales or because exports was anyways, you know, not doing that well for us. So is it largely the higher institutional sales or there’s something else also within that to drive such a margin? Here.
Shashant Yadnick
We’Ve explained it but I’LL try and summarize that. So we see there are three four things that have happened. One is due to purpose inflation. We’ve not we’ve delayed or staggered our path through of rising prices to our customers. Okay, that is one. Second is there is a unfavorable business mix change wherein there is further growth in institutional business compared to channels in this quarter. And further, our contribution from export is also marginally reduced. So all three coming together has resulted in some bit of drop in markets.
Ashish if you recall last quarter last year, Q3, the contribution of exports to the company’s top line was at about 8.3%, whereas in this quarter is it at percent. So that contribution has gone down. While obviously you are correct in mentioning that exports for us has been relatively soft, but even within quarter on quarter, comparatively the contribution has gone down. So that was one point. The other two points were. Elsa Shamanj.
Ashish Dair
Okay, okay, got it. Thank you so much.
Shashant Yadnick
Thanks Ashley.
Operator
Thank you. A reminder to all the participants, please restrict your questions to per participant. If you have a follow up question, please rejoin the queue. Again, the next question is from the line of Umang Mehta from Kotak Securities. Please go ahead.
Umang Mehta
Hi. Thank you for the opportunity. I had two questions which were linked to each other. First one was in terms of cables, this acceleration from say 20% plus volumes to 40% now, which segments? I mean, from the data that you see, which segments have seen the most kind of uptick versus last quarter? And the second one was, given that 88% of your sales are through distributors, it would mean that even a large portion of your cable sales are through distributors. Wouldn’t they logically tend to upstock cables?
Also, when they see aluminium and copper kind of go up, just like wires, stocking happens. Those were the two questions. Thanks.
Shashant Yadnick
So as far as cable sales to distributors are concerned, ultimately distributors are kind of servicing institutional demand, right? So depending on when the project requires a specific cable shipment, that is to the extent that the distributor would stock up on that product, cables relative to wires are very bulky, right? So to further than a certain extent, even the distributors wouldn’t be able to stock up a lot of those cables. Plus, even in terms of average pricing, cables are very expensive compared to wires.
So all these distributors would have a limit to the extent that capital is available to them. And if they lock it up in something which is cables and which might not have a demand from an institutional project right away, then they might lose out on investing in products like wires or even in smeg where there might have been better demand. So generally even though cables are through distributors, we don’t see distributors stocking up cables. To a small extent it might be possible, but largely this is a wires phenomenon, not cables phenomenon.
Sorry, your first question was on. I couldn’t get that.
Umang Mehta
Yeah, the question was that this acceleration from 20 plus to 40, which segments have seen the highest uptick versus last quarter
Shashant Yadnick
So far. You are aware that since we are not directly supplying to the end customers, we don’t have a full visibility on which sectors are generating what kind of demand in particular sector. We get to know to the extent that our distributors will give us visibility to or to the extent that we generate that demand from the end customers for our distributors. So it will be very difficult for me to guide you that in specific this quarter what will be the segment which will be driving what percentage of demand for the cable.
But maybe on a yearly basis after the Q4 call, during the Q4 call, I’ll be able to give you much clear or maybe a bit better guidance on the sectors they are generating. What kind of.
Umang Mehta
Thank you so much.
Shashant Yadnick
Thank you.
Operator
Thank you. The next question is from the line of Achal Lohari from nuawa Wealth Management Ltd. Please go ahead.
Achal Lohade
Yeah, good afternoon team. Thank you for the opportunity. Two questions. First on the growth, if I, if I understand right, essentially the copper aluminium price will be up 40, 50% on a yy basis if we assume the same price continues for next two, three quarters. Right. So you know, do you see, you know, any impact on the demand given the budgets will take a hit in that case or the customer will have to rework on in terms of their requirements. Is there any case for such risk?
Shashant Yadnick
Well, I think as mentioned earlier, we have zero control over commodity prices so we cannot comment largely. We’ve been also reading the same that there is uncertainty but if prices continue or not is something beyond our control. But any demand, foreseeable demand in the coming quarter and the next, I think there is strong momentum. So I don’t, we don’t see any difficulty with respect to demand. Does that answer your question?
Achal Lohade
Yeah. So essentially you’re saying you’re not seeing any impact of such steep increase in the commodity price on the demand as such for next two quarters?
Vidit Trivedi
Yeah, absolutely not.
Achal Lohade
Got it. The second question I had was with respect to, you know, the margins. So if I, if I see the inventory is what we carry, you know, we do carry substantial inventories like even for the current quarter closing, we are talking about close to 6000 crores worth inventory. Right. Raw material plus finished goods. So in a rising price scenario, wouldn’t that benefit actually initially before it really, I mean, if you could explain to us the inventory cycle as to how it plays out, how much typically we hold how much and you know how it gets sold out eventually.
Shashant Yadnick
So actually you are aware that for us we hedge our. Inventory so we. Are pricing is not at the time of procurement but it is done at a future level once we have an order for that inventory. So while we obviously have or are going on with higher inventory levels, so inventories are not priced, they will get priced in the future. And that is something which is there for stability of our margins which we will be reporting for over a decade now. So we don’t see scenarios of inventory gains or inventory losses just because we price it at a future date.
The higher inventory that we are maintaining is because of the reason, as Shashank mentioned, that we are anticipating good demand for Q4, similar to what we had done at the end of Q2 and which played out quite well for us in Q3 where we were able to service a lot of end customers demand because we had higher inventory and obviously we have a lot of capacity.
Achal Lohade
Understood. Great. Those were my two questions. Thank you so much.
Shashant Yadnick
Thanks.
Operator
Thank you. The next question is from the line of Vidit Trivedi from Asian Market Securities. Please go ahead.
Vidit Trivedi
Yeah, thank you for the opportunity and congratulations. Great set of numbers. Most of the questions have been wanted to know what what’s the margin profile when it comes to the institution sales, the retail sales and the exports?
Shashant Yadnick
Margins in exports are definitely much higher as compared to domestic margins. When we export cable, obviously it again depends a lot on the geography that we are exporting. But generally historically we’ve been making at least around 15% of EBITDA margins in our export. If you look at the domestic sales for US cables versus wires in cables generally we make anywhere between 9 to 12% of EBITDA margin, whereas in case of wires it is between 15 to 16%. Obviously there are variations on a quarterly basis depending on the commodity prices, demand etc.
But generally this is the range of margin profile across the different business.
Vidit Trivedi
Thank you. Just one last clarification. As you have mentioned that the price hike during the quarter is almost 70. To 80% of whatever the commodity, the. Way commodity has reacted, is it fair to assume that it is a minimum in the range of 10 to 15% overall price hike?
Shashant Yadnick
You can obviously compute the commodity inflation which was there in the past quarter along with the rupee depreciation just Give a multiple of 75 to 80% to that more or less you’ll get the amount of pass through that.
Aniruddha Joshi
Got it sir. Thanks a lot.
Shashant Yadnick
Thanks.
Operator
Thank you. The next question is from the line of Aniruta Joshi from ICICI Securities. Please go ahead.
Aniruddha Joshi
Thanks for the opportunity. So in terms of FMC FMEG two questions can you articulate more on the business of fans? How it had shaped up again means that business is also facing some of the regulatory headwinds and again commodity prices have also gone up. So how is the performance in case of fans? Secondly, if you can share more details on the solar business, I guess you initially mentioned that it has grown 100% yui but at least what is the current revenue run rate, EBIT margin in that business etc.
Yeah, thanks
Shashant Yadnick
Sure. Anhyrup so on the fans as we’ve been discussing during the quarter as well, initially during the beginning of the quarter the opting was pretty slow because as you were aware the summer season this time around was lower and there was a lot of channel inventory which was there during the year and those inventories are getting liquidity during the beginning of the quarter quarter in October and November and hence the uptake was pretty slow in December it took off in a small way because there was BW transition which was to be implemented from 1st of January onwards and hence there was good uptake with a good uptake in December.
Hence on an overall quarterly basis the fans industry would have while would have been largely flattish or a small degrowth and our performance was also pretty much in line with the industry as far as the Q4 or Q1 FY27 expectations are concerned. It will depend a lot on how the coming summer season is expected to be. Definitely because the BW is getting implemented from 1st of January, the new norms are getting implemented from 1st of January. There will be a bit of price hike that everybody will be taking.
I believe the price hike would be in the range of 2 to 4% and which will be taken during the course course of first one one and a half month of this calendar year itself. But to a larger extent the uptake and performance of next quarter and the quarter to come will depend on how the anticipation of next summer season is as far as your question on solar is concerned. Solar as was mentioned in the opening comment, had a very good quarter, another very good quarter after having one one and a half year of very good upheaval momentum.
We expect even Q4 to be very strong. You would have seen that we had actually launched a newer range of 350kW solar inverters last quarter and that did very well for us. The outlook is very very positive. From our side we believe solar which is already the top or the largest contributor for us on the SMEG segment, will continue to grow even faster in the coming couple of years as well since all the government teams are already getting implemented and are in motion. Hence from our side the outlook is very positive.
As I mentioned in the previous quarters fall the margin profile of solar is currently in high single digits and we are maintaining that to a certain extent. Since solar has now become the largest category for us in smeg. That is one of the reason why for SMEG has become profitable and that is what we had mentioned in our earnings presentation as well. The but business mix or the product mix change which has gone through that solar has become the largest category where switches and switch gears have been doing quite well since last three to four years.
Conduit price and fittings is doing much better. All of that has contributed to smug now becoming continuously profitable for us. And as the year going ahead now we believe that SMEG will continue to improve its profitability towards the guided range of 8 to 10% of pi530.
Aniruddha Joshi
Yeah, thanks. This is very helpful. Just second question. You have mentioned in the PPT that We have grown 59% in domestic CNW and we would have gained market share. So roughly what will be the market growth means? Upwards of 50%. Upwards of 40% means where will you pick the market growth per se?
Shashant Yadnick
Getting exact market growth for this quarter will be very difficult at this point of time because we’ll have to wait out for other larger listed companies to come up with their results over the course of next two to three weeks. But I would definitely believe that the. Growth would have been higher in this quarter compared to what it was in the first half. To the best of our estimation, in the first half of this year industry growth was at around 15 to 16%. I believe the industry growth would have been more closer to 20% at least.
And this is the entire industry put together, organized, present organized, but specifically to our kind of market share gains we would have realized within this quarter. I think we should probably wait out for another two to three weeks to get to know the exact numbers of our peers.
Aniruddha Joshi
No, but that’s surely we will wait. But like if 59% is our growth and market growth maybe 20%, that’s a. Massive jump in the market share for us. Is that a fair understanding?
Shashant Yadnick
Yes, that’s something that I was mentioning, we need to appreciate the fact that in spite of our 300bps decrease in our margin profile, we’ve been able to deliver 34% profitability growth in this segment. And that is on the back of such high 59% domestic growth. That’s obviously a bit of an exports growth as well. I think our strategy is working very well. We have been working on the ground since the inception of Project Spring where we are going into each and every white spaces that we have within cables as a wire.
Be it product category or be it geography, we are working very extensively with our distributors and trying to improve their growth as well as our wallet share of their growth. So all of these initiatives are helping us. You know, in the first half as well, we had grown cables and wires at 26% year on year. While as I mentioned, we believe the industry growth would have been around 16% whereas in this quarter we’ve grown at around 60%. So definitely we have gained a lot of market share.
Aniruddha Joshi
Yeah, that’s really great. Yeah, thanks. And congrats on the market share gains.
Shashant Yadnick
Thanks Anuk.
Operator
Thank you very much. We will take that as a last question. I would now like to hand the conference over to Mr. Niyant Mahu for closing comments. Thank you. And over to you sir.
Unidentified Participant
Thank you everyone for your attendance. Thank you.
Operator
Thank you very much. On behalf of Polycab India Limited. That concludes this conference. Thank you for joining with us today. And you may now disconnect your lines.