Subscribe to Polycab India: Choice Broking

Key competitive strengths: • Market leader in wires and cables in India • Diverse suite of electrical products with varied applications across a diverse customer base • Strong distribution network • Manufacturing facilities with high degree of backward integration • Strong brand in the electrical industry • Experienced and committed management team

Valuation and Outlook

Coming to the valuation, based on the higher price band, PIL is demanding a P/E valuation of 14.6x (to its TTM EPS of Rs. 36.8), which is at a discount to its peer average of 20.1x. Based on FY19E and FY20E EPS, the stock is valued at P/E multiple of 17.2x and 13.8x, respectively, which again is available at discount to peer average. Thus, considering the above observations we feel that the issue is reasonably priced, thereby providing a “SUBSCRIBE” rating.

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