When it comes to specific institutional business, we hedge the commodity so that the company does not retain

any risk, it is passed on, said R Ramakrishnan, CEO, Polycab India, in an interview with ETNOW.

Edited excerpts:

It has been a great listing for you. What differentiates Polycab from competition?

It is a very proud day for us when 3,25,000 shareholders have joined the Polycab family. We remain committed to the smallest of our investors and thank you so much for your overwhelming welcome to Polycab. It is very simple. Polycab is the result of the hat tremendous entrepreneurial vision which Inder Jaisinghani, our chairman and managing director, has demonstrated over the last 50 years. We are extremely proud of the fact that today we have a great blend of entrepreneurial passion and a solid professional management team comprising of 500 strong professionals that have joined the company along with the band strength that the company already had. Number three, we have the widest range of products in cable and wire and we are also the most cost effective. Number four, the distribution is absolutely strong and number five is our brand. We are very proud of having this amalgamation of strength and this is what differentiates us from competition.

Give us your anchor book details. It was subscribed by 25 investors. Could you talk about the prominent ones?

We are proud of the quality of response from our anchors. We have Nomura. Theleme as well as Chris Capital which is a PE firm. They have all invested. I am particularly proud of the fact that the finest Indian mutual funds are part of our book. We have Birla MF, Reliance MF, Sundaram MF, Franklin Templeton and Reliance MF.

We have now even Kotak MF which has come in the main book subsequently and we have L&T Mutual Fund, SBI Life, Bajaj Alliance and Birla Sun Life in terms of the life insurance part and we also have ICICI Lombard in terms of general insurance. We have Abacus, which is again a very promising fund.

With the risk of higher dependency on wires and cables segment. How do you plan to handle volatility in raw material prices?

Commodity for us is a pass through — be it copper, aluminium or the rupee dollar. Every month, we price in the product based on previous month’s average. Landed cost in India is what drives our price list changes in the beginning of each month. Our discount structure is standardised and pan India we ensure parity in terms of pricing but our basic price list changes every month.

What you need to remember is we are not a commodity company, commodity is an important part of our business but our focus is simple. We drive revenues, manage our costs, drive efficiency, build the brand, enhance distribution and thereby create value for our stakeholders.

Commodity is just a part of our business which we have found an excellent way to manage. When it comes to specific institutional business, we do hedging of the commodity so that the company does not retain any risk, it is passed on.

Are there any plans to diversify into other segments? What is the expected revenue in the next couple of years?

Actually, we have opened up approximately Rs 40,000-crore business opportunity in consumer electricals. Today, we are part of the Rs 8,000-crore fan industry. We are part of the Rs 23,000-crore lighting industry. We are part of the switches and switchgear industry which is a Rs 20,000-crore industry, not to mention conduit pipes, some solar products, some agricultural pumps, solar pumps and things like that.

This Rs 40,000 crore, in the next five years, will grow to about Rs 70,000 crore while from core cable and wire business, Rs 52,500-crore market opportunity will increase to Rs 1,02,500 crore. We have shown tremendous traction in driving the consumer electrical business. We have a strong fan portfolio with our own manufacturing unit, a lighting portfolio, again with a manufacturing unit. We have the conduit pipe portfolio, not to mention a switches and a switchgear portfolio. We manufacture our products directly or through some joint venture companies or a dedicated OEM. This combination has resulted in our success in the consumer electrical business.

You have a widespread network of manufacturers, warehouses as well as distributors. How do you see this assist your growth?

Our true strength is 2,800 dealers and distributors spread across India. In terms of the spread, approximately 30% are in the south, about 27% are in the north, about 20% is in the west and about 18% in the east. We have a great pipeline of dealers and distributors pan India. Through this we sell our products and our range of both cable, wire and the consumer products. We cover 100,000 outlets in terms of retailers and most of it is covered with our sales team in terms of the long arm salesmen and our distributors with permanent journey cycle and an FMCG orientation to consumer electricals. This has made a big difference in terms of our go-to market strategy.

We have sales force automation and we have distributor management systems and all that gives a lot of information and a lot of power.


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