Shares of Polycab India gained over a percent to Rs 7,148 in morning trade on August 28 after Jefferies retained its buy call, citing the company’s consistent double-digit sales growth in the cables and wires segment over the past 12 quarters.
With a target price of Rs 8,180 per share, the brokerage implies an upside potential of 16 percent from the last close of Rs 7,064 per share. The brokerage highlighted Polycab’s diversified revenue streams, with B2G contributing about 30 percent, private B2B capex 35 percent, housing 20 percent, exports 6 percent and FMEG 10 percent.
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Market share gains, rising power capex, margin turnaround in FMEG, and strong order books in RDSS and Bharat Net are seen as key growth drivers. Jefferies estimates an over 26 percent earnings per share CAGR between FY25–28, while valuing the stock at 32 times FY27 earnings, in line with its five-year historical average.
Polycab's net profit for the first quarter increased by 50 percent from the year-ago quarter to Rs 600 crore, while revenue from operations for the quarter increased by 25.7 percent to Rs 5,906 crore. The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 47.1 percent to Rs 858 crore. EBITDA margins for the quarter expanded by over 200 basis points from the year-ago period to 14.5 percent.
Polycab’s wires and cables segment posted a robust performance, with revenue rising to Rs 5,228 crore in the June quarter, up from Rs 3,995 crore a year ago. The FMEG (fast-moving electrical goods) business also saw healthy growth, with revenue increasing to Rs 454 crore from Rs 385 crore in the same period last year. Meanwhile, revenue from the EPC (engineering, procurement, and construction) segment declined to Rs 347 crore from Rs 427 crore a year ago.
At about 10:30 am, shares of the company were trading at Rs 7,142, higher by 1 percent from the last close on the NSE. Polycab India shares have risen 19 percent in the last three months but still trade 3 percent lower on a year-to-date basis.
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