Polycab Share Price: Navigating the Ups and Downs
Polycab India Ltd., a dominant player in the cables and wires industry, has experienced notable fluctuations in its share price over the past year. After reaching a 52-week high of ₹7,331.45, the stock faced a significant drop to ₹3,801.00, primarily due to concerns arising from an Income Tax department investigation into unaccounted sales worth ₹1,000 crore .
Despite this setback, the company has shown resilience, with its share price recovering to ₹5,438.40 as of May 6, 2025 .(INDmoney, The Economic Times)
Financial Performance: A Closer Look
Polycab’s financials reflect a robust growth trajectory:
- Revenue Growth: In FY24, the company reported a 29% year-on-year increase in revenue, reaching ₹18,000 crore.
- Net Profit: Net profit surged by 28.5% to ₹546 crore in Q4 FY24, indicating strong operational efficiency.
- EBITDA Margin: The EBITDA margin improved to 26%, showcasing enhanced profitability.
- Earnings Per Share (EPS): EPS stood at ₹115.41, reflecting the company’s solid earnings performance.
These figures underscore Polycab’s strong financial health and its ability to generate consistent profits.
Growth Drivers and Future Outlook
Several factors contribute to Polycab’s optimistic growth prospects:
- Industry Expansion: The cables and wires industry in India is projected to grow at a CAGR of 13% over the next five years, providing a favorable environment for Polycab’s expansion .
- Product Diversification: With over 12,000 Stock Keeping Units (SKUs), Polycab has a diversified product portfolio catering to various market segments.
- Strategic Investments: The company’s entry into the Extra High Voltage (EHV) segment and the Fast Moving Electrical Goods (FMEG) sector positions it for long-term growth.
- International Presence: Polycab has expanded its global footprint to 79 countries, with international trade revenues contributing 8% to its consolidated revenues .
These strategic initiatives indicate Polycab’s commitment to sustaining its market leadership and exploring new growth avenues.
Analyst Insights and Market Sentiment
Market analysts have provided the following insights:
- Sharekhan maintains a “Buy” rating with a target price of ₹7,300, citing Polycab’s strong growth outlook .
- Goldman Sachs and Jefferies have downgraded the stock to “Neutral,” adjusting the target price to ₹5,005 due to valuation concerns and increased competition.
These mixed ratings reflect the market’s cautious optimism regarding Polycab’s future performance.
Dividend Policy and Shareholding Pattern
Polycab has demonstrated a consistent dividend payout history:
- Dividend Payments: The company declared a dividend of ₹30 per share in FY24, up from ₹20 in FY23 .
- Shareholding Changes: As of December 31, 2024, promoter holdings decreased to 63.05%, while Domestic Institutional Investors and Foreign Institutional Investors increased their stakes to 10.52% and 12.76%, respectively.
These developments indicate a growing institutional interest in Polycab, reflecting confidence in the company’s long-term prospects.
Conclusion: Investment Considerations
Polycab’s strong financial performance, strategic growth initiatives, and expanding global presence make it a compelling investment opportunity. However, potential investors should consider the recent regulatory challenges and market volatility. Conducting thorough due diligence and consulting with financial advisors is recommended before making investment decisions.
Disclaimer: This blog is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions.
