Shares of Polycab India jumped back in the green on Tuesday after closing lower on Monday thanks to a major brokerage initiating coverage on the stock.
What Happened: UBS initiated coverage on the stock with a “buy” rating and a price target of ₹8,550. The target reflects around 29% upside from the stock’s last closing price of ₹6,616.90.
The brokerage firm said that the company has a strong position within the domestic electrification market, where it holds a 40% share. Polycab is poised to benefit from long-term cyclical growth in the cable and wire (C&W) segment, driven by the robust creation of low-voltage infrastructure in India, the analysts said.
The company’s competitive edge is reinforced by its extensive manufacturing capacity and leading market share, supported by a strong business-to-consumer network and significant business-to-business (B2B) scale, UBS added.
See Also: Zomato Shares Dip Amid Reports Of Stake Sale By Antfin Singapore
Polycab’s export business, which is distribution-led, presents additional growth opportunities in largely untapped international markets. The key near-term triggers for Polycab include better-than-expected domestic volume growth, market share gains within India, and an increase in export activities, according to the research firm.
UBS attributed Polycab’s business “dominance” to three main factors: its robust capacity expansion to serve a diverse range of customers, major investments in ramping up its distribution network and a strong focus on the institutional and B2B segments, which ensures its continued leadership in these markets.
Price Action: Polycab India’s share price was up 1.55% to trade at ₹6,719.25 shortly after market open on Tuesday.
Read Next: Brokerages Give HCLTech's New CEO A Thumbs Up, Shares Tick Up
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.