Shares of Polycab India fell nearly 7% to Rs 6,611.4 in Friday’s trade on the BSE after the company reported a 3.5% year-on-year (YoY) rise in consolidated net profit of Rs 445 crore in the September 2024 quarter. net of Rs 429.77 crore in the same period last year.
Its operating income rose 30.4% to Rs 5,498 crore, beating analyst estimates of Rs 4,956 crore. However, the increase in total expenditure outpaced revenue growth, surging 35% to Rs 4,984 crore.
Inder T. Jaisinghani, Chairman and MD, Polycab India, said, “We expect demand momentum to continue, supported by increased government spending, continued investment by private players and strong real estate uptake. With a strong focus on operational excellence, we standing firm is well positioned to capitalize on emerging opportunities and drive steady growth.”
The fast-moving electrical goods (FMEG) segment recorded growth of 18% YoY, driven by initiatives such as channel expansion, product architecture enhancements and implementation of a strong influencer management program, the company said.
Should you buy, sell or hold Polycab shares? Here’s what analysts say:
Motilal Oswal
Polycab’s earnings in the second quarter were mostly in line with our estimates, as higher losses in the FMEG business and lower C&W margins offset higher-than-expected revenue growth. The company is experiencing strong demand in the C&W segment in both domestic and international markets. However, increasing competitive intensity and a lower share of the distribution business in overall domestic revenue had an adverse impact on margins. We are structurally positive on Polycab due to its leadership position in the C&W segment and strong growth trajectory.
Motilal Oswal has a ‘Buy’ rating on the stock. However, it will review its estimates after the meeting.
nuvma
Consolidated revenue grew 30% YoY to Rs 5,450 crore, 10% above our and consensus estimates of 10%. C&W revenue grew 24% YoY driven by favorable commodity price movements and continued strong demand environment. Given average copper/aluminum prices are 12-13% YoY higher, we expect mid-teens to high-teens volume growth for Polycab. In comparison, KEI and Havells indicated volume growth of 11-12%/15% in 2QFY25.
Nuvama has a ‘Buy’ rating on the stock, based on 48x Dec-26 EPS, resulting in a price target of Rs 8,340. However, the brokerage firm will revisit its estimates and price targets after its earnings conference call, scheduled for Friday October 18th.
(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own opinions. It does not represent the views of The Economic Times)
