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Polycab Hit with Rs 327 Crore Tax Demand; Shares Slump 3%

Polycab India has received an income tax demand order for Rs 327.45 crore related to the assessment year 2024-25. The company believes the demand is inflated due to computational errors and is preparing to file for rectification and an appeal. Despite the tax issue, the company reported robust quarterly results with a 46.1% year-on-year revenue increase. Its shares, however, closed 3.2% lower following the news.

Key Points: Polycab Rs 327 Crore Tax Demand: Shares Fall 3%

  • Rs 327.45 crore tax demand received
  • Company to file rectification and appeal
  • Strong Q3 revenue growth of 46.1%
  • Wires & cables business revenue jumps
  • Shares closed down 3.2%
2 min read

Polycab receives Rs 327 crore income tax demand, shares down 3 pc

Polycab India receives Rs 327 crore income tax demand for AY 2024-25, plans appeal. Shares fell 3% despite strong quarterly earnings.

"the total demand appears higher than the additions... due to possible computational or clerical errors - Polycab India"

Mumbai, March 4

Shares of Polycab India Limited ended lower on Wednesday after the company said it has received an income tax demand of Rs 327.45 crore for the assessment year 2024-25.

The order was issued by the Office of the Deputy Commissioner of Income Tax, Mumbai, and was received by the company on March 3, 2026.

The demand follows an assessment order that includes disallowances and additions amounting to Rs 41.87 crore.

However, Polycab said that after consulting its tax advisors, it believes the total demand appears higher than the additions mentioned in the order due to possible computational or clerical errors.

The company said these errors can be corrected under the provisions of the Income Tax Act and that it has started the process of filing a rectification application with the jurisdictional Assessing Officer.

Polycab also said that it considers the tax demand to be legally unsustainable and is preparing to file an appeal against the additions under the Income Tax Act, 1961.

The company added that it does not expect any material impact on its financial position or operations because of the order.

Despite the tax issue, the company reported strong quarterly earnings. Its revenue for the December quarter rose 46.1 per cent year-on-year to Rs 7,636.1 crore.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 34.2 per cent to Rs 966.7 crore from Rs 720 crore a year ago.

However, EBITDA margin narrowed to 12.66 per cent from 13.8 per cent last year.

The company's advertising and sales promotion expenses more than doubled to Rs 91 crore from Rs 37.3 crore in the same quarter last year.

Finance costs also rose to nearly Rs 69 crore compared to Rs 50 crore a year ago, according to its earlier stock exchange filing.

Segment-wise, revenue from the core wires and cables business jumped to Rs 6,852 crore from Rs 4,450 crore last year.

The fast-moving electrical goods (FMEG) segment saw revenue rise to around Rs 500 crore from Rs 423.1 crore, while the EPC segment reported revenue of Rs 407 crore compared to Rs 392 crore in the year-ago period.

Following the developments, shares of Polycab India Limited closed at Rs 8,274.50 on the BSE, down Rs 273.90, or 3.20 per cent.

- IANS

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Reader Comments

S
Sarah B
As an investor, this is concerning. The 3% drop reflects the uncertainty. While the company says it's an error, such a large demand notice shakes confidence. The strong revenue growth is positive, but rising finance and ad costs need watching. Will hold my shares but watching closely.
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Arjun K
Polycab is a solid 'Make in India' story. Wires and cables business jumping to 6852 Cr! 🚀 The tax issue seems like a procedural hurdle. If their advisors say it's an error, it probably is. Our tax system needs to be more supportive of homegrown champions, not create unnecessary roadblocks.
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Priya S
The timing is interesting. Just after stellar quarterly results, a tax demand appears. Makes you wonder. However, doubling ad expenses to 91 Cr is a bit aggressive, no? Maybe the taxman is looking at those spends. Companies should be transparent.
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Karthik V
This is why retail investors panic. One notice and shares fall 3%. But look at the numbers - revenue up 46%! The core business is firing on all cylinders. This tax thing will get sorted. Might be a good buying opportunity for long-term holders.
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Michael C
Respectfully, while the company calls it an error, a demand of this size from the Deputy Commissioner's office isn't issued lightly. There's due process. Let's see what the rectification and appeal reveal. The market has reacted rationally to the news and associated risk.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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