Polycab India share price today: Shares of Polycab India slipped 7% in early deals on Friday after the leading wires and cable maker announced its Q2 earnings, which were in line with estimates. Polycab India stock slipped 6.91% to Rs 6987.85 today against the previous close of Rs 7102.40 on BSE. Total 0.27 lakh shares of the firm changed hands amounting to a turnover of Rs 18.66 crore. Market cap of the firm fell to Rs 1.04 lakh crore on BSE.
Polycab India shares are trading lower than the 5-day and 10 day moving averages but higher than the 20 day, 30 day, 50-day, 100-day and 200-day moving averages.
Polycab reported a 3.6% year-on-year (YoY) rise in net profit to Rs 445.2 crore in the quarter ended September 2024 against a net profit of Rs 429 crore. Revenue from operations climbed 30.4% to Rs 5,498.4 crore in the last quarter against Rs 4,218 crore in the corresponding period of the preceding fiscal.
Total income rose to Rs 5,574.6 crore in the last quarter against Rs 4,253 crore a year ago period. In the June quarter, company reported total income of Rs 4756.4 crore.
Expenses in Q2 rose to Rs 4,984 crore in Q2 from Rs 3695.9 crore in the same period a year ago.
The fast moving electric goods (FMEG) segment registered a growth of 18% YoY, fueled by initiatives such as channel expansion, product architecture improvements, and robust execution of the influencer management program, the company said.
Jefferies has assigned a ‘buy’ call on Polycab India with a target price of Rs 8,315 per share.
Growth in the wires business outpaced that of cables. However, operating profit margins were hit by increased competition and changes in the product mix, said the global brokerage. The Fast-Moving Electrical Goods (FMEG) segment posted healthy 18 percent sales growth, but losses in this segment persist, it added.
ICICI Securities has assigned a price target of Rs 6790, down 5% from the previous close. However, the new price target is higher than the earlier Rs 6,400.
“We model Polycab to report revenue/PAT CAGR of 18.5%/19.4% over FY24–27E and RoCE of 20% in FY27E. Maintain HOLD with DCF-based revised target price of Rs 6,790 (earlier: Rs 6,400; implied P/E of 39x FY26E EPS),” said the brokerage.
“FMEG segment reported strong revenue growth at the cost of margins. We reckon the trend may continue in near term as the company aims to expand its market share. (4) Capex intensity has remained high. Polycab is on track to spend INR 10-11bn in FY25, highlighted by INR 5.8bn on capex until Sep’24,” it added.
Nuvama Institutional Equities has assigned a buy rating to the stock with a price target of Rs 8,340.
“Exports grew 36% QoQ, contributing 6.1% to topline. Working capital days improved to 44 days (vs 61 days QoQ) on the back of higher payables days. Revenues for 1HFY25, crossed INR 100bn, highest ever in the history of the company. We have a BUY rating on the stock, basis 48x Dec-26EPS, yielding a price target of Rs 8,340,” said Nuvama in its earninsg review report.
Key risks to the brokerage’s assumptions are deceleration in the Government and private capex spending. Continued demand weakness in the consumer markets hurting Polycab’s FMEG segment. Significant fall in copper prices, leading to fall in revenue growth.
Inder T. Jaisinghani, Chairman and Managing Director, Polycab India said, “We have concluded the first half of the financial year on a strong note, delivering our highest-ever second quarter and half yearly revenues and profit, driven by robust market demand. Further, CRISIL has upgraded its rating on our long-term bank facilities to “CRISIL AAA/Stable” reflecting our strong financial performance, market leadership position, and sustained growth prospects. Looking ahead, we expect the demand momentum to continue, supported by increased government spendings, continued investment by private players and robust real estate offtake. With a strong focus on operational excellence, we stand well positioned to capitalise on the emerging opportunities and drive steady growth.”
Polycab India Limited is the country’s largest manufacturer of wires and cables and one of the fastest growing FMEG companies with a consolidated turnover of Rs 122 billion in FY22. The company’s business operations span across India through 23 manufacturing facilities, 15 plus offices and 25 plus warehouses.
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