Your Exclusive course accessible password: asjpremiumacademy

Explore easy demat account creation process and get access to exclusive member only courses.

Follow us:

Polycab 2709
 

Polycab India Ltd, a major player in the electrical goods sector, primarily manufactures wires and cables but has diversified into fast-moving electrical goods (FMEG) like fans, lighting, and switches. The company has shown strong financial performance and stability, making it an attractive long-term investment.

The company is expanding its FMEG product line, which is expected to drive future revenue. Analysts project significant growth by 2025, with targets as high as ₹9,422, representing a potential 33% rise from current levels​

Financial Performance:

  • Revenue Growth: Polycab reported a 27.87% revenue increase in 2023, reaching ₹180.39 billion. Net profit rose by 40.39%, signaling healthy profitability.
  • Market Capitalization: Polycab’s market cap is around ₹1.01 trillion, with a price-to-earnings (P/E) ratio of 57.11, indicating strong investor confidence but also a potentially high valuation.
  • Shareholding Pattern: The company has a strong promoter holding of 65.02%, with rising foreign institutional investor (FII) interest, which grew to 13.63% in mid-2024​
  • PE ratio: Price to Earnings ratio, which indicates how much an investor is willing to pay for a share for every rupee of earnings. A general rule of thumb is that shares trading at a low P/E are undervalued (it depends on other factors too). Polycab India has a PE ratio of 17 which is high and comparatively overvalued.
  • Share Price: – The current share price of Polycab India is Rs6,788.25. One can use valuation calculators of ticker to know if Polycab India’s share price is undervalued or overvalued.
  • Return on Assets (ROA): – Return on Assets measures how effectively a company can earn a return on its investment in assets. In other words, ROA shows how efficiently a company can convert the money used to purchase assets into net income or profits. Polycab India has an ROA of 87% which is a good sign for future performance. (higher values are always desirable)
  • Current ratio: – The current ratio measures a company’s ability to pay its short-term liabilities with its short-term assets. A higher current ratio is desirable so that the company can be stable to unexpected bumps in business and economy. Polycab India has a Current ratio of 48.
  • Return on equity: – ROE measures the ability of a firm to generate profits from its shareholders’ investments in the company. In other words, the return on equity ratio shows how much profit each rupee of common stockholders’ equity generates. Polycab India has an ROE of 16% .(higher is better)
  • Debt to equity ratio: – It is a good metric to check out the capital structure along with its performance. Polycab India has a Debt to Equity ratio of 0which means that the company has a low proportion of debt in its capital.
  • Sales growth: – Polycab India has reported revenue growth of 74% which is fair in relation to its growth and performance. 
  • Operating Margin: – This will tell you about the operational efficiency of the company. The operating margin of Polycab India for the current financial year is 50%.
  • Dividend Yield: – It tells us how much dividend we will receive in relation to the price of the stock. The current year dividend for Polycab India is Rs30 and the yield is 44 %.
  • Earnings Per Share: – It tells us how much profit is allocated to to each outstanding share of a common stock. The latest EPS of Polycab India is Rs69. The higher the EPS, the better it is for investors. 

The stock was facing resistance around 6900-6925 levels. The stock gave the indication for breaching of resistance as it had plotted a marubuzo candle and another green candle surpassing ORB with good volumes. Hence recommended for further momentum.

 

Please enable JavaScript in your browser to complete this form.