Polycab Share Price Gains Amid BSNL BharatNet Project Win
Shares of Polycab India Ltd, a leading wires and cables manufacturer, saw an upward trend on Thursday, March 14, 2024, after the company secured a ₹3,000 crore contract from Bharat Sanchar Nigam Ltd (BSNL) for the BharatNet project.
The stock surged 2.1% to reach ₹5,114 per share on the National Stock Exchange (NSE) during early trade. By 10:00 AM, it was trading at ₹5,046.5, up 0.75% from the previous closing price.
This development marks a significant milestone for company, further strengthening its position in India’s telecommunication infrastructure sector and reinforcing its leadership in the wires and cables (W&C) industry.
Polycab-BSNL Agreement: Key Details of BharatNet Project
Polycab India officially announced in an exchange filing that it has entered into an agreement with BSNL as the Project Implementation Agency (PIA) for the BharatNet project in the Bihar Telecom Circle, valued at ₹3,002.99 crore.
Project Scope and Responsibilities
As per the contract, company will be responsible for:
- Designing, supplying, constructing, installing, and upgrading the middle mile network of BharatNet.
- Operation and maintenance of the newly developed network.
- Maintenance of the existing BharatNet network under the BSNL contract.
The agreement is a part of India’s ambitious BharatNet initiative, which aims to provide affordable high-speed broadband connectivity to rural and remote areas across the country.
Breakdown of Project Financials
The ₹3,002.99 crore contract includes:
- Capital Expenditure (CapEx): ₹1,549.66 crore
- Operating Expenses (OpEx): ₹929.79 crore
- OpEx for the existing network: ₹523.53 crore
Project Duration
- Construction Period: 3 years
- Maintenance Contract: 10 years
Notably, company clarified that the company’s promoters have no financial interest in the awarding entity, ensuring a transparent and fair contract acquisition.
Polycab’s Strong Financial Performance in Q3 FY2024-25
Company continues to demonstrate robust financial performance, with strong growth in both revenue and profitability.
Key Financial Highlights (Q3 FY2024-25 vs. Q3 FY2023-24)
- Consolidated Net Profit:
- ₹464.34 crore (Up 11.48% from ₹416.51 crore YoY).
- Revenue from Operations:
- ₹5,226.06 crore (Up 20.4% from ₹4,340.47 crore YoY).
These figures reflect Companies strong market position, driven by increasing demand for its wires, cables, and electrical products.
Segment-Wise Business Growth
- Wires & Cables (W&C) Business:
- Grew 12% YoY, showcasing steady demand for infrastructure and industrial cabling solutions.
- Fast-Moving Electrical Goods (FMEG):
- Registered an impressive 45% YoY growth, reflecting strong consumer demand for electrical appliances.
- Other Business Segments:
- Surged 111% YoY, indicating diversification and expansion beyond traditional offerings.
These diverse revenue streams have helped company to scale its operations and maintain profitability in a competitive market.
Future Growth Strategy
With its latest ₹3,000 crore contract win, Polycab India is well on track to further solidify its presence in India’s telecom infrastructure sector.
Company’s Vision for Growth
Inder Jaisinghani, Chairman and Managing Director of Polycab India, emphasized the company’s long-term vision, stating:
“We have achieved a remarkable milestone of successfully surpassing our first five-year guidance of reaching a ₹200 billion top-line by FY26 ahead of time — delivering ₹210 billion in revenue for the calendar year 2024.”
This achievement highlights Companies strong execution strategy and ability to exceed growth targets ahead of schedule.
Key Growth Drivers for Polycab
- Expansion in India’s Telecom Sector
- With BharatNet and 5G rollout, demand for high-quality optical fiber cables (OFCs) and network infrastructure is set to rise.
- Increased Government Spending on Digital India
- Projects like BharatNet and Smart Cities Mission are expected to boost demand for Polycab’s products.
- Growth in Infrastructure and Construction
- Rising urbanization and industrialization in India are fueling the need for power cables, housing wires, and electrical solutions.
- Strong Demand for Electrical Goods (FMEG)
- Expanding its presence in switches, fans, and lighting solutions will contribute to revenue diversification.
With these strong market tailwinds, Polycab is poised for continued growth in both domestic and international markets.
Market Outlook for Polycab India
With consistent financial growth, strategic expansion, and a solid order book, Polycab remains a strong investment contender in India’s manufacturing and infrastructure sectors.
Factors Supporting Polycab’s Stock Performance
- ₹3,000 Crore BharatNet Contract: Boosts revenue visibility and strengthens Polycab’s presence in telecom infrastructure.
- Strong Q3 Financial Results: Double-digit growth in revenue and profitability.
- Expanding Product Portfolio: Increasing footprint in wires, cables, and electrical appliances.
- Rising Government Investments: Policies favoring telecom, infrastructure, and rural connectivity will drive demand for Polycab’s solutions.
As a leader in the wires and cables industry, Polycab India remains well-positioned to capitalize on India’s digital transformation journey and rapid urban infrastructure development.
Conclusion
Polycab India’s share price climbed over 2% on March 14, 2024, following its ₹3,000 crore contract win from BSNL for the BharatNet project in Bihar. The deal includes a three-year construction period and a 10-year maintenance contract, strengthening Polycab’s position in India’s telecom infrastructure sector.
Additionally, Polycab reported a strong 20.4% increase in revenue and an 11.48% jump in net profit for Q3 FY2024-25, highlighting strong financial momentum.
With expanding business verticals, rising demand for electrical goods, and major government infrastructure projects, Polycab is well-positioned for long-term growth and value creation for its investors.
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