Ajcon Global has come out with its report on Polycab India. The research firm has recommended to "Subscribe" the IPO in its research report as on April 04, 2019
Polycab has one of the most extensive portfolio of wires and cables to cater to the needs of their institutional and retail customers in different industries (Source: CRISIL Research). Their products are either (i) made-to-stock, produced based on demand forecasts from customers and/or company sales team, or (ii) made-to-order, where they work closely with their customers to develop customized products that are in line with their needs. Company’s established customers include institutional clients such as L&T Construction and Konkan Railway Corporation Ltd. and other global leading brand companies. The Company exports to 40+ countries and intends to continue to focus on their existing international markets such as the United Kingdom, United States, European Union, United Arab Emirates and Australia.Valuation and Outlook
We believe increase in consumer spending, infrastructure
growth, and industrial investments to drive electricals industry. At the upper end of the price band, Polycab IPO is valued at a P/E of 16x at 9MFY19 annualized EPS which is cheap as compared to listed peers like Havells, Bajaj Electricals and KEI Industries. With due consideration to factors like: a) well Positioned to capture Industry Potential across Wires and Cables and FMEG segments, b) huge market to be tapped, c) market leader in wires and cables in India, d) diverse suite of electrical products with varied applications across a diverse customer base, e) backward integration by manufacturing of essential raw materials inhouse, f) strong distribution network (2,800+ Authorized Dealers and Distributors 100,000+ Retail Outlets), g) strong brand in the electrical industry, h) proven track record of financial performance (FY16 –18): Revenue CAGR: 14%, EBITDA CAGR:
24% and PAT CAGR: 42%, Leverage: 0.34x, decent ROE of
15.76%, we recommend “SUBSCRIBE” to the issue.
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