Polycab India share price: Hold Polycab India, target price Rs 2500: ICICI Securities

has hold call on Polycab India with a target price of Rs 2500. The current market price of . is Rs 2425.6. Time period given by analyst is one year when Ltd. price can reach defined target.




Polycab India Ltd., incorporated in the year 1996, is a Mid Cap company (having a market cap of Rs 36314.66 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-2021.

Financials

For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 3986.81 Crore, up 17.48 % from last quarter Total Income of Rs 3393.64 Crore and up 30.08 % from last year same quarter Total Income of Rs 3064.79 Crore. Company reported net profit after tax of Rs 325.71 Crore in latest quarter.

Investment Rationale
Polycab reported strong revenue growth of 34.9% YoY in Q4FY22, but gross margins contracted 354bps YoY due to higher input inflation and limited price hikes. The company continues to steadily expand its distribution network, which will likely result in continued volume growth. It also launched an economy segment brand Etira, with housing wires and plans to expand the product portfolio to gain market share in semi-urban and rural areas. THe brokerage models Polycab to report revenue and PAT CAGR of 15.7% and 20.8% over FY22-FY24E. It remains structurally positive on the company due to its competitive advantages and growth opportunity in consumer durables. It maintains HOLD with a revised DCF- based target price of Rs2,500 (implied P/E 31x of FY24E EPS; prior TP Rs2,610).

Promoter/FII Holdings
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.