April 19, 2024

Prabhudas Lilladher’s analysis report on Polycab India

Polycab reported wholesome income development of 16.8% YoY in Q3FY24, even after disruption in enterprise throughout final ten days of Dec-23 as a result of IT raid at numerous areas. Progress was largely from cable enterprise on the again of strong quantity development in home enterprise. Relating to revenue tax searches, Polycab reiterated that as on date, the corporate had not acquired any written communication from IT dept. The corporate expects sustained quantity development in dom. C&W enterprise on the again of robust demand surroundings, supported by authorities’s steady concentrate on infrastructure growth and pickup in personal capital expenditure. Accordingly, Polycab is anticipated to realize Rs 200bn revenues ahead of focused by FY26E below Venture LEAP. We anticipate Income/EBITDA/PAT CAGR of 19.0%/20.9%/21.9% over FY23-26E led by robust home demand surroundings supported by authorities measures & revival in personal capex. Improve to ‘BUY’.

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We improve our ranking from Accumulate to ‘BUY’ at an unchanged TP of Rs 6,021 valuing at PE of 39x FY26E earnings, given vital correction in inventory costs on issues of tax evasion.

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Polycab India – 22012024 – prabhu