Edelweiss initiates buy on Polycab India, target price Rs 845

Edelweiss has initiated coverage on Polycab India in the long term with a target price of Rs 845. Shares of Polycab India ended up 5% at Rs 704.35 on Tuesday while the BSE Sensex closed 291.62 points up at 38,506.09.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 1932.98 crore, down -20.93% from last quarter sales of Rs 2444.80 crore and up 14.88% from last year same quarter sales of Rs 1682.65 crore. The company has reported net profit after tax of Rs 135.05 crore in the latest quarter.


Investment Rationale

Polycab India is a leader in the domestic cables and wires (C&W) sector with significant lead in capacity as well as revenue market share, said Edelweiss. The company’s healthy prospects in C&W, driven by government’s sustained focus on infra and strengthening retail business through ramp up in the FMEG segment, will drive healthy 23% earnings CAGR and 20% plus ROCE over FY19-21.