Sharekhan's research report on Polycab India
Revenue growth was strong at 25% y-o-y outperforming our estimates of Rs 6,764 crore led by robust performance across segments such as C&W (24%), FMEG (33%) and Others (20%). OPM rose 106 bps as C&W segment’s margins normalised FMEG segment surprisingly breake even at EBIT level. Operating profit of Rs. 1,025 crore rose 35% y-o-y; PAT stood at Rs. 734 crore (33% up y-o-y). Management hinted at a market share of 26-27% up from 25-26% in FY24. Market share rose significantly up from 19% in FY19. Continued momentum in government capex and private capex with real estate sector’s growth augurs well for players like Polycab.
Outlook
We expect revenue/PAT to clock a CAGR of 21%/23%, respectively from FY25-27, with a healthy RoCE of 33%. Hence, we maintain a Buy rating with an unchanged PT of Rs 7300.
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