Buy Polycab India: target of Rs 2375: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on Polycab India

POLYCAB reported Q1FY2022 topline in line with our expectations with revenue EBITDA/ PAT at Rs. 1,881 crore/Rs. 139 crore/Rs. 75 crore (+93% y-o-y, +142% y-o-y). The company reported a decline in gross profit margin by ~400 bps due to increased raw-material prices, while OPM improved by 152 bps to 7.4%, largely due to cost-saving initiatives offset by unfavourable operating leverage and input cost volatility. A strong balance sheet and net cash position provide comfort in the present environment. The company’s strong focus on expanding its distribution will help deepen its presence in semi-urban and rural markets. Management expects Q2FY2022 to be better than Q1 and H2FY2022 to be better than H1FY2022.

Outlook

We retain Buy on Polycab India Limited (POLYCAB) with unchanged PT of Rs. 2,375, given improving demand scenario, widespread dealer network, and lower copper prices in June, which decreases pressure on OPM.

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