Asit C Mehta report on Polycab India
Polycab India Limited is India’s largest manufacturer of wires and cables (W&C) and a rapidly growing player in Fast-Moving Electrical Goods (FMEG). The company is also active in Engineering, Procurement, and Construction (EPC) with turnkey infrastructure solutions. Polycab’s purpose is “Connecting all to a brighter future”, underpinned by values in innovation, customer-centricity, collaboration, and resilience. Polycab places a premium on quality, with its manufacturing facilities holding prestigious quality management system certifications in compliance with ISO 9001, ISO 14001, and OHSAS 18001 requirements. As a frontrunner in the industry, company dominate various product categories such as Fans, Switches, Water Heaters, Switchgears, Luminaires tailored for residential, commercial, and industrial applications, Solar Panels, Conduits and Accessories, and cutting-edge Home Automation solutions. The company boasts a network of 28 state-of-the-art manufacturing facilities, including two strategic joint ventures with Techno and Trafigura. These facilities are strategically located across the states of Gujarat, Maharashtra, Uttarakhand, and the union territory of Daman and Diu.
Outlook
Additionally, revenue is expected to grow with a CAGR of ~20% from FY25 to FY27E, driven by increased government capital expenditure in the mobility and power sectors, particularly for renewable energy projects, as well as continued real estate growth. We recommend an "Accumulate" rating for the stock, applying a PE multiple of 43.5X to the EPS of 194, for the target price of ₹ 8440, indicating a potential upside of around ~19%.
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