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.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.