The stock has risen 40% in the last one month and yielded 85% returns since the start of 2023.
For US brokerage house Jefferies, Polycab is its most preferred stock in the mid-and-small cap space citing its consistent performance and promising outlook.
“We firmly believe that Polycab is a compelling investment, presenting a strong opportunity in the Indian capex and housing markets, with approximately 65% of its business geared towards B2B customers,” Jefferies said in a client note. “Based on the outstanding Q1 performance, we have revised our EPS estimates for FY24-26, raising it by 6-7%. Moreover, our estimated sales and profit CAGR for FY23-26 stands at an impressive +17% and +26%, respectively,” it added.
On Thursday, more than 58 lakh Polycab shares exchanged hands on the BSE and NSE, over three times the combined average daily volume for the last one month. Of the 23 analysts who reviewed Polycab’s first quarter earnings, 11 of them have a ‘buy’ rating on the stock. Ten analysts stayed ‘neutral’ while two of them recommended ‘selling’ the stock, showed a Bloomberg poll of analysts. Consensus price target rose a whopping 25% to ₹4,341.8 per share, Bloomberg data showed.Mumbai-based Polycab reported a 42% year-on-year (y-o-y) jump in June quarter consolidated revenue to ₹3,889.4 crore, while net profit surged nearly 82% y-o-y to ₹399.3 crore. Margins received a big boost due to low input costs and product price revisions.
“Polycab is reaping oversized benefits (growth, margins) of its domestic leadership, and its growing focus on global markets can drive the next leg of growth,” said Nuvama in a note to clients. “The company might well meet FY26E top-line guidance of ₹200 billion in FY25E itself.”