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Business News/ Markets / Stock Markets/  Polycab share price hits lifetime high. Axis Securities sees more upside
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Polycab share price hits lifetime high. Axis Securities sees more upside

Polycab share price today witnessed strong buying after announcement of Q4 results 2024 on Friday last week

In Q4 results 2024, Polycab India Ltd surpassed market estimates on both revenue and PAT fronts, demonstrating its ability to outperform expectations. (Photo: Pixabay)Premium
In Q4 results 2024, Polycab India Ltd surpassed market estimates on both revenue and PAT fronts, demonstrating its ability to outperform expectations. (Photo: Pixabay)

Stock market today: 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. This is particularly noteworthy when considering the broader market trend. 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 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.

While Analyzing the Q4 results 2024 of Plycab India Ltd, Axis Securities said, "The company reported revenue growth of 29% YoY to 5,592 Cr, which stood 17% above our estimates. Wires & Cables segment grew by 19% YoY to 4,865 Cr, thanks to favourable industry demand and robust volume growth. Higher execution in project business resulted in the EPC (Others) segment's growth of 275% YoY to 502 Cr. The FMEG segment also reported robust growth of 17% YoY to 358 Cr, backed by seasonal demand from the fan segment during the quarter. Gross margins were also above our estimates by 250bps at 30.5%, backed by strategic price revision and a favourable product mix. 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.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, and not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Published: 13 May 2024, 03:07 PM IST
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