Polycab India Ltd., incorporated in the year 1996, is a Mid Cap company (having a market cap of Rs 33525.99 Crore) operating in Consumer Durables sector.
Polycab India Ltd. 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.
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2780.90 Crore, down -30.25 % from last quarter Total Income of Rs 3986.81 Crore and up 45.92 % from last year same quarter Total Income of Rs 1905.81 Crore. Company reported net profit after tax of Rs 223.82 Crore in latest quarter.
Sharp recovery in EBITDA margins (expanded 413bps YoY) and strong revenue growth in FMEG segment (60.6% YoY), though on low base. Input material prices are now stabilizing; price hikes during the quarter and operating leverage resulted in higher profitability for the company. We believe, to deepen its presence in rural markets Polycab is working on two strategies– increasing distribution penetration and building a rural-fit product portfolio. It plans to launch fans under Etira brand in FY23. It models Polycab to report revenue and PAT CAGR of 16.9% and 25.4% over FY22-FY24E. It remains structurally positive on Polycab due to its competitive advantages and growth opportunity in consumer durables, but it sees limited stock price upside at current valuations. Maintain HOLD with a DCF-based target price of Rs2,250 (implied P/E 26x of FY24E EPS).
Promoters held 68.08 per cent stake in the company as of 31-Mar-2022, while FIIs owned 5.75 per cent, DIIs 9.18 per cent.
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