- Despite a general sell-off in early morning deals on Dalal Street, Polycab’s share price managed to hold its ground, drawing significant attention from bullish investors.
- Opening at ₹6,269 per share on NSE and reaching an intraday high of ₹6,468.90, Polycab’s share price not only climbed to a new intraday high but also a new lifetime high.
- Axis Securities, in light of this performance, projects a further increase to a target of 6,588 per share for the scrip.
Polycab’s share price holds steady amid market sell-off, reaching a new lifetime high. Axis Securities projects further growth, setting a target of ₹6,588 per share.
Polycab Q4 results 2024
Polycab India Limited’s Q4 results, announced last week, delivered a strong performance. The company surpassed market estimates on both revenue and PAT fronts, demonstrating its ability to outperform expectations. However, it fell short of market expectations on the EBITDA margins, indicating areas for potential improvement.
Analysis of Polycab’s Q4 Results
Axis Securities reported a revenue growth of 29% YoY to ₹5,592 Cr for Polycab, which stood 17% above their estimates. The Wires & Cables segment grew by 19% YoY to ₹4,865 Cr, thanks to favourable industry demand and robust volume growth. Despite increased absolute operating profit, Polycab’s operating margins declined by 50bps YoY at 13.6% vs. Axis Securities estimate of 14.8%. A sharp increase majorly led the decline in employee expenses. PAT stood at ₹553 Cr vs ₹428 Cr YoY, up 30% YoY (17% above our estimates).
Polycab share price outlook
Axis Securities highlights several factors that contribute to a positive outlook for Polycab’s share price. The company has maintained its leadership position in the organized C&W segment, boasting a market share of 25-26% in FY24. This is supported by a robust distribution network and strong brand recall. Polycab is also gaining market share in the Wires & Cables segment. The management anticipates strong traction in domestic Cables & Wires, an increased contribution from exports, and robust demand driven by government spending. Additionally, growing donations from EPC orders are expected to further enhance the company’s profitability.
Polycab share price target
Axis Securities advises stock market investors to consider Polycab’s potential. They project a Revenue/PAT CAGR of 20%/21% over FY25-26E, with EBITDA margins expected to marginally improve to 14.2% in FY26E. Taking recent developments and the outcome of the IT search operations into account, they value the company at 38x FY26E EPS of ₹173. This valuation leads to a target price of ₹6,588/share, providing a clear indication of the potential growth in Polycab’s share price.
Conclusion
Despite the broader market trend, Polycab’s share price has demonstrated resilience and growth, reaching a new lifetime high. With strong Q4 results and a positive outlook backed by robust industry demand and strong brand recall, the company’s share price is projected to continue its upward trajectory. However, investors are advised to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
