Buy Polycab India, target price Rs 3215: Sharekhan by BNP Paribas

Sharekhan by BNP Paribas has buy call on Polycab India with a target price of Rs 3215. The current market price of Polycab India is Rs 2678.0.

Polycab India, incorporated in the year 1996, is a Mid Cap company (having a market cap of Rs 40019.64 Crore) operating in Consumer Durables sector.

Polycab India 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.

Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 3330.14 Crore, up 19.75 % from last quarter Total Income of Rs 2780.90 Crore and up 5.54 % from last year same quarter Total Income of Rs 3155.23 Crore. Company has reported net profit after tax of Rs 271.26 Crore in latest quarter.

The company’s top management includes Mr.Inder T Jaisinghani, Mr.Bharat A Jaisinghani, Mr.Nikhil R Jaisinghani, Mr.Rakesh Talati, Mr.Sutapa Banerjee, Mr.R S Sharma, Mr.T P Ostwal, Mr.Pradeep Poddar. Company has B S R & Co. LLP as its auditors. As on 30-06-2022, the company has a total of 15 Crore shares outstanding.

Investment Rationale
Polycab is expediting efforts to gain market share by growing its B2C business, scaling up FMEG business and boosting its exports. Further, realignment of distribution strategy in the FMEG segment, launch of new products and increasing penetration in the rural markets bodes well for long-term growth. The brokerage maintained that in the long term, Polycab is expected to benefit from government infrastructure investments, increase in housing demand and a pick-up in private capex spending. Also, the wires and cables major is tapping emerging opportunities in data centers, telecom, defence and EVs. Operating performance is likely to further improve on year-on-year basis with increase in scale and backward integration.

Promoter/FII Holdings
Promoters held 67.99 per cent stake in the company as of 30-Jun-2022, while FIIs owned 5.71 per cent, DIIs 9.03 per cent.