Buy Polycab India, target price Rs 2771: Axis Securities

Axis Securities has buy call on Polycab India with a target price of Rs 2771. The current market price of is Rs 2226.55. Time period given by analyst is one year when . price can reach defined target.

Polycab India Ltd., incorporated in the year 1996, is a Mid Cap company (having a market cap of Rs 33157.95 Crore) operating in Consumer Durables sector.

Polycab India Ltd. key Products/Revenue Segments include Cables & Wires, Income from Eng.Construction Contracts, Scrap, Grants, Export Incentives and Job Work for the year ending 31-Mar-2022.


For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2780.90 Crore, down -30.25 % from last quarter Total Income of Rs 3986.81 Crore and up 45.92 % from last year same quarter Total Income of Rs 1905.81 Crore. Company reported net profit after tax of Rs 223.82 Crore in latest quarter.

Investment Rationale
Polycab has maintained the leadership position in the organized C&W segment with a market share of 24%+. Moreover, with superior financial strength, expansion of distribution network into tier-2, and tier-3 cities, and strong brand recall, it is poised to gain market share from unorganised players in both Wires and FMEG segments. The management has set a revenue target of ~Rs 20,000 Cr by FY26 led by faster and more profitable growth in the B2B segments (FMEG and Retail Wires) and industry-leading growth in the B2C business. The brokerage believes the growth will be driven by demand recovery, new product launches, product premiumization, and increasing contribution of exports over the long run. It values Polycab at 27x FY24E EPS of Rs 103 to arrive at a target price of Rs 2,771/share, which gives an upside of 26% from the CMP.

Promoter/FII Holdings
Promoters held 68.08 per cent stake in the company as of 31-Mar-2022, while FIIs owned 5.75 per cent, DIIs 9.18 per cent.

(Disclaimer: Recommendations given in this section or any reports attached herein are authored by an external party. Views expressed are that of the respective authors/entities. These do not represent the views of Economic Times (ET). ET does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same. Please consult your financial adviser and seek independent advice.

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