Sharekhan's research repor on Polycab India
The company reported strong outperformance on OPM and net profit along with double digit y-o-y growth in FMEG and strong improvement in EBIT. Adjusting for tax write back in Q2FY2020, net profit would have risen by 31% y-o-y. Expect H2 to be better than H1 as FMEG continues to witness double-digit growth and C&W sees improvement with rising infrastructure investments. We expect margins to be aided by various cost initiatives undertaken. Polycab’s strong balance sheet and net cash position provide comfort in the present environment.
We recommend Buy on Polycab India Limited (Polycab) with a PT of Rs. 1,060, given healthy net earnings growth outlook over FY2021E-FY2023E along with attractive valuation.
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