Prabhudas Lilladher's research report on Polycab India
We have increased FY23-24 EPS estimates by 4% each to mainly reflect higher top-line growth assumption, as management expects ~20% growth in W&C segment. We believe margins will gradually recover and remain structurally positive for long term given 1) sustained increase in B2C mix with focus on premiumization 2) pick up in infrastructure/ renovation/ construction activities 3) implementation of Project Leap (targeting Rs200bn revenue along with margin improvement and GTM expansion by FY26) and 4) consumer shift gains from unorganized to organized sector.
We estimate Sales/ PAT CAGR of 14%/ 29% over FY22-24E and value the stock on SOTP based target price of Rs2,472 (derived PE of 26.3x FY24 EPS; W&C/ FMEG valued at 25x/ 30x). Maintain Hold.
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