Why Polycab Shares Are Trading 5% Lower Today
Take Stock Of The Week Ahead

Get all the latest Share Market trends and news to set you up for the week ahead.

Congratulations!
You have successfully subscribed.

Shares of Polycab, a leading cables and wires manufacturer in India, dropped after news of Income Tax Department searches at nearly 50 of the company’s locations. The stock hit a day’s low of ₹5,404 on the Bombay Stock Exchange (BSE) as the department’s investigation wing conducted raids in Mumbai.

What to know? Polycab, holding a 15% market share in India’s organized cables and wires sector, has seen its stock value more than double over the past year. The company is widely regarded as a key beneficiary of the capital expenditure upcycle in India.

In its September quarter, Polycab reported its highest-ever quarterly Profit After Tax (PAT), a 59% year-on-year increase, boosted by a 30% volume growth in cables and wires (C&W) and an improved product mix. Analysts identify three primary growth drivers for Polycab: private capital expenditure, government/public capital expenditure, and housing sector growth.

See also: Disney+ Hotstar Clinches Top Spot In Brand Perception In India, Says YouGov Report

What are analysts saying? Jefferies, a global brokerage firm, anticipates a Compound Annual Growth Rate (CAGR) of 19% in sales and 28% in PAT from FY23-26E for Polycab, driven by higher volumes and increasing traction in Fast-Moving Electrical Goods (FMEG) from FY25E. The firm has set a target price of ₹6,220 for the stock.

Domestic brokerage firm Prabhudas Lilladher also projects a robust Revenue/EBITDA/PAT CAGR of 19.8%/21.7%/22.8% over FY23-26E, supported by strong domestic demand, government measures, and a revival in private capital expenditure. They have set a target price of ₹5,943 for Polycab. The company aims to achieve ₹200 billion in revenues before its FY26E target under Project LEAP.

Share Price: Polycab India Ltd. shares were trading 4.22% lower at ₹5,382.00 on Friday afternoon, close to market close.

Read next: Why Adani Wilmar, Patanjali Shares Are Climbing After Key Govt Decision

Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.

Comments
Loading...
MoversTrading IdeasPolycab