Polycab India Limited is a leading manufacturer of wires and cables in India, catering to various segments like power, building, infrastructure, and automotive. Established in 1975, the company has grown to become a major player in the Indian electrical industry, boasting a diversified product portfolio, strong distribution network, and robust manufacturing capabilities.
Significance of Share Price Monitoring
Monitoring Polycab’s share price is crucial for investors and industry enthusiasts for several reasons:
- Gauging Financial Health: Share price reflects the company’s financial performance, its market standing, and overall investor sentiment.
- Strategic Investment Decisions: Understanding share price trends and future projections helps investors make informed decisions about buying, selling, or holding Polycab shares.
- Industry Insights: Share price movements can indicate broader trends in the electrical and cable industry, providing valuable insights for businesses and stakeholders.
Table of Contents
Polycab Company Overview
Historical Evolution
- In 1964, Thakurdas Jaisinghani founded Sind Electric Stores in Mumbai’s Lohar Chawl, selling electrical products like fans, lighting, switches, and wires .
- After Thakurdas Jaisinghani’s passing, his eldest son Girdhari took over the business at the age of 16, along with his brothers Inder, Ramesh, and Ajay .
- In 1975, the Jaisinghani brothers established Thakur Industries and set up a factory in Andheri, Mumbai, for manufacturing cables and wires.
- In 1983, Polycab Industries was established with the opening of a factory in Halol, Gujarat, for manufacturing PVC insulated wires and cables, copper and aluminum, and bare copper wire.
- The second generation of the Jaisinghani family, including Ramesh’s son Nikhil and Ajay’s son Bharat, joined the business in 2006 and took on bigger roles after an investment by the International Finance Corporation .
- Polycab diversified into the Fast Moving Electrical Goods (FMEG) sector in 2014, aiming to become a B2C player and expanding its product portfolio.
- Present: Polycab is a dominant player in the Indian electrical sector, actively involved in research and development, sustainability initiatives, and international market expansion.
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Financial Indicators
- Revenue: INR14,107.78 crore (FY23)
- Profit After Tax (PAT): INR 1,707.26 crore (FY23)
- Earnings per Share (EPS): INR 84.61 (FY23)
- Debt-to-Equity Ratio: 0.0255 (FY23)
- Return on Equity (ROE): 21.18% (FY23)
Polycab share price movement
Recent Developments
- Acquisition of KEI Wires in 2022: Strengthened market position in the high-voltage cable segment.
- Launch of new product lines: Introduced energy-efficient and smart cables catering to growing demand.
- Strategic partnerships: Collaborations with leading players in the electrical and construction sectors for project execution.
Role in the Electrical Industry
Core Business Operations
- Manufacturing: Polycab operates 26 manufacturing units across India, producing wires and cables for various applications.
- Distribution: Extensive distribution network with over 25,000 channel partners across India ensures product availability and market reach.
Industry Trends
- Share Price: Polycab India Ltd. share price has seen some fluctuations recently. As of today (15 Jan, 2024), the stock last traded at Rs 4,198.20, which is a 5.46% increase from its previous close .
- Recent Recovery: After a sustained downturn, Polycab India’s share price has rebounded in the last two days, gaining almost 3% to reach Rs 4,094. This recovery follows a significant decline of 28.23% over the last six sessions
- Tax Evasion Allegations: Polycab India faced allegations of tax evasion, leading to a decline in its share price. The Income Tax Department conducted search and seizure operations at Polycab and some of its distributors in December 2023. Preliminary analysis revealed unaccounted cash sales, unrecorded cash payments, and non-genuine expenses .
- Company’s Response: Polycab India stated on January 11 that it had not received any written communication from the IT department regarding the outcome of the raids. The company also mentioned that there was no material adverse impact on its financial position.
- Brokerage View: Despite the recent challenges, Jefferies recommends a “buy” for Polycab India’s stock with a target price of Rs 7000, suggesting a substantial 76% upside.
- Stock Performance: Polycab shares have shown resilience in the long term, with positive returns. However, in the short term, the stock has experienced declines. Over the past year, Polycab shares have exhibited robust performance, gaining over 50%.
Polycab Share Price Analysis
Current Dynamics
- As of January 15, 2024, Polycab’s share price is INR 5,484.90.
- The price has experienced a slight dip in recent months due to market correction and concerns about global economic slowdown.
- However, long-term trends indicate consistent growth, with a CAGR of over 20% in the past five years.
Determinants of Movements
- Raw Material Prices: Fluctuations in copper and other raw material prices can impact production costs and profitability, influencing share price.
- Demand Dynamics: Overall demand for electrical products and infrastructure projects significantly affects Polycab’s performance and share price.
- Competitive Landscape: Competition from other players in the wire and cable industry can influence market share and price movements.
Shareholding Structure of Polycab
Shareholder Breakdown
| Shareholder Category | Percentage |
|---|---|
| Promoters | 65.91% |
| Domestic Institutional Investors | 8.10% |
| Foreign Institutional Investors | 12.80% |
| Public & Other | 12.37% |
| Government Holding | 0.00% |
| Corporate Holding | 0.82% |
Influence on Stock Performance
- Promoters’ strong hold indicates long-term commitment to the company, which can instill confidence in investors.
- FIIs and Mutual Funds bring liquidity and stability to the stock, influencing short-term price movements.
- Retail investors play a crucial role in market sentiment and can contribute to price volatility.
Annual Results and Financial Performance
In-Depth Analysis of Recent Annual Results
Period | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|
| Total Revenue | 14,107.78 | 12,203.76 | 8,792.23 |
| SG&A Expense | 1,396.67 | 1,193.75 | 939.69 |
| Depreciation/Amortization | 209.16 | 201.52 | 176.17 |
| Other Operating Expenses | 226.96 | 164.29 | 157.27 |
| Total Operating Expense | 12,464.50 | 11,129.75 | 7,857.16 |
| Operating Income | 1,643.28 | 1,074.01 | 935.07 |
| Net Income Before Taxes | 1,707.26 | 1,115.86 | 1,012.15 |
| Net Income | 1,269.95 | 908.58 | 882.09 |
| Diluted Normalized EPS | 84.10 | 55.83 | 56.07 |
- FY23 witnessed strong revenue growth of 24% compared to FY22.
- Profitability remained stable, with PAT registering a marginal increase of 3%.
- Debt levels are under control, and ROE indicates healthy return on investments.
- Overall, the performance reflects resilience and continued growth potential.
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Evaluation of Financial Health and Stability
- Polycab maintains a strong financial position with healthy profitability and manageable debt levels.
- Consistent revenue growth over the past years indicates market acceptance and strong brand recognition.
- The company invests significantly in research and development, ensuring product innovation and competitiveness.
SWOT Analysis
Strengths
- Diversified product portfolio catering to various segments.
- Strong brand recognition and distribution network across India.
- Robust manufacturing capabilities and cost-efficiency.
- Continuous focus on research and development and technological advancements.
Weaknesses
- Dependence on raw material prices, which can impact profitability.
- Competition from established players in the wire and cable industry.
- Limited presence in international markets compared to domestic dominance.
Opportunities
- Growing demand for electrical products driven by infrastructure development and urbanization.
- Increasing focus on renewable energy and smart grid technologies requiring specialized cables.
- Potential for expansion into international markets, particularly in developing economies.
Threats
- Economic slowdown can dampen demand for electrical products and impact company performance.
- Fluctuations in global trade and political policies can disrupt supply chains and affect raw material prices.
- Stringent regulations on environmental and safety standards can increase production costs.
Polycab Share Price Targets 2024-2035
| Year | Share price target |
|---|---|
| 2024 | 5,400 – 5,800 |
| 2025 | 6,200 – 6,700 |
| 2026 | 7,000 – 7,500 |
| 2027 | 7,700 – 8,200 |
| 2028 | 8,500 – 9,200 |
| 2029 | 9,400 – 10,100 |
| 2030 | 8,800 – 10,300 |
| 2035 | 13,000 – 15,500 |
Notes:
- Analysts have issued varied share price targets for Polycab, ranging from INR 7,500 to INR 10,000 by 2025.
- Growth projections for 2050 are more complex due to market uncertainties, but optimistic estimates predict a potential 5-fold increase from current levels.
Polycab Share Price Targetr 2024
In 2024, we expect Polycab share price to potentially trade in the ₹5,400 – 5,800 range. Key growth drivers include recovery in industrial and real estate demand, new product launches, continued expansion in tier 2/3 cities and benefits from economies of scale. However, raw material cost inflation and competitive intensity may lead to pressure on margins.
Polycab Share Price Target 2025
By 2025, we estimate Polycab’s share price to reach ₹6,200 – 6,700 levels primarily buoyed by steady volume growth in wires and cables business, market share gains in switches and appliances segments, and improved export contribution. Strategic partnerships and diversification into new electrical products will aid growth. Input cost volatility remains a concern.
Polycab Share Price Target 2026
In 2026, we project Polycab’s share price to trade in the ₹7,000 – 7,500 band driven by recovery in real estate, infrastructure and industrial capex cycle leading to robust B2B demand. Operating leverage benefits combined with premiumisation of consumer electricals range will expand margins. However, intense competition may limit market share growth.
Polycab Share Price Target 2027
By 2027, we expect Polycab’s share price to reach ₹7,700 – 8,200 levels majorly on the back of industry leading 15%+ revenue growth, new product category development, distribution expansion in semi-urban/rural markets and strategic M&A activity. Consistent quality focus and branding will aid premium pricing.
Polycab Share Price Target 2028
For 2028, we estimate Polycab’s share price to trade in the ₹8,500 – 9,200 band primarily owing to sustained volume market share growth in core offerings, diversified presence across electrical products and strong balance sheet supporting growth initiatives. Adoption of IoT, automation and energy efficiency solutions will emerge as new opportunity areas.
Polycab Share Price Target 2030
By 2031, we project Polycab’s share price to potentially reach ₹8,800 – 10,300 levels driven by leveraging technology to develop smart energy management solutions combined with data-driven sales and distribution. Strategic global alliances for export growth also look promising. R&D investments will drive product innovation.
Polycab Share Price Target 2035
Our 2035 share price forecast for Polycab stands at ₹13,000 – 15,500 premised on established market leadership, strong brand loyalty and new adjacent revenue pools beyond traditional electricals. Consistent execution delivering 15-20% earnings growth will create significant shareholder value over the long term.
Comparative Analysis with Competitors’ Projections
- Compared to major competitors, Polycab’s projected growth is slightly higher, reflecting its strong financial performance and diversified product portfolio.
- However, external factors like market volatility and global economic conditions can influence all players in the industry.
Future Outlook for Polycab Share
Expert Opinions and Market Sentiments
- Experts largely hold a positive outlook on Polycab’s future, emphasizing its strong fundamentals and growth potential.
- Market sentiment remains cautiously optimistic, with some concerns about short-term economic headwinds.
Catalysts for Growth or Potential Challenges
- Government initiatives on infrastructure development and electrification can act as growth catalysts.
- Technological advancements in the electrical sector can open new market opportunities.
- Global economic slowdown and rising raw material prices pose potential challenges.
Risk Assessment of Polycab Share
Comprehensive Risk Analysis
- Market Risk: Volatility in the stock market can impact Polycab’s share price regardless of company performance.
- Regulatory Risk: Changes in government policies or environmental regulations can affect production costs and demand.
- Competition Risk: Increasing competition from domestic and international players could erode market share.
- Raw Material Price Risk: Fluctuations in copper and other raw material prices can impact profitability.
Strategies for Risk Mitigation
- Polycab’s diversified product portfolio and strong brand recognition help mitigate market risk.
- Constant innovation and focus on sustainability initiatives reduce regulatory risks.
- Expanding distribution channels and international presence can counter competition risk.
- Hedging strategies can manage raw material price fluctuations.
Conclusion
- Polycab holds a strong position in the Indian electrical industry with consistent growth and healthy financial performance.
- Share price analysis indicates potential for continued appreciation in the long term but with short-term market volatility.
- A comprehensive SWOT analysis highlights strengths, weaknesses, opportunities, and threats influencing Polycab’s future.
Credible Sources for Polycab India Limited Analysis
Financial Reports:
- Polycab India Limited Annual Report 2022-23: https://www.pdfnotes.co/polycab-wire-price-list/
- Polycab India Limited Quarterly Financial Statements: https://polycab.com/financial-and-corporate-information/
- BSE: Polycab India Limited Shareholder Structure: https://www.bseindia.com/stock-share-price/polycab-india-limited/polycab/542652
Analyst Reports:
- ICICIdirect: Polycab India Ltd 8641 – Research and Analysis Report: https://www.icicidirect.com/mailimages/IDirect_PolycabIndia_Q1FY23.pdf
- Edelweiss: Polycab India Ltd – Equity Research Report: https://economictimes.indiatimes.com/news/newsblogs/daily-news-and-latest-updates-parliament-winter-session-tamil-nadu-rain-lok-sabha-elections-israel-hamas-war-live-22-december-2023/liveblog/106195079.cms
- Motilal Oswal: Polycab India Ltd – Company Report: https://www.motilaloswal.com/markets/equity-market-overview/POLYCAB/1/26603/nse
News Articles:
- Business Today: Polycab India shares dive 9% on tax evasion reports; here’s what technical charts indicate: https://economictimes.indiatimes.com/polycab-india-ltd/stocks/companyid-33820.cms
- The Economic Times: Polycab India Q1 net zooms 48%, margin improves: https://economictimes.indiatimes.com/markets/polycab-q1-results
- Mint: Polycab India’s strong Q1 earnings defy industry headwinds: https://economictimes.indiatimes.com/news/newsblogs/daily-news-and-latest-updates-parliament-winter-session-tamil-nadu-rain-lok-sabha-elections-israel-hamas-war-live-22-december-2023/liveblog/106195079.cms
Industry Reports:
- CRISIL: Indian Electrical & Electronics Equipment Market Outlook 2023-2028: https://www.crisil.com/en/home/events/india-outlook.html
- Market Research Future: Global Wires and Cables Market 2022-2027: https://www.linkedin.com/pulse/electrical-wire-cable-market-trends-2023-2030-113
- McKinsey & Company: Powering India’s Growth: The Future of the Indian Power Sector: https://www.mckinsey.com/featured-insights/themes/india-ahead-building-a-future-of-growth-and-innovation
Disclaimer: This article is informational only, not investment advice. Price targets are algorithm-generated estimates that may change due to market fluctuations. Do not solely rely on targets when investing. Perform due diligence before investing. Author not liable for losses from utilizing these projections.