At 1:28 pm, Polycab shares were trading notably lower by 5.04 percent at Rs 5,335 on the National Stock Exchange (NSE). Remarkably, the stock had recorded a striking surge of over 100 percent throughout 2023
Overview of Polycab India: Polycab India Limited holds the distinction of being the nation’s largest manufacturer of wires and cables. Its extensive operational footprint encompasses 23 manufacturing facilities, more than 15 offices, and over 25 warehouses, spreading across India.
Stock Plunge Amidst Income Tax Raids: On December 22, Polycab India shares faced a significant decline, plummeting by over 5 percent. The drop came in response to reports suggesting that the Income Tax Department had initiated searches at 50 locations linked to Polycab, including residences and offices of top management figures. Despite these developments, the precise reasons behind these searches and the nature of the ongoing investigation remain undisclosed.
Market Impact and Performance: At 1:28 pm, Polycab shares were trading notably lower by 5.04 percent at Rs 5,335 on the National Stock Exchange (NSE). Remarkably, the stock had recorded a striking surge of over 100 percent throughout 2023, effectively doubling investors’ investments. This surge starkly contrasts with the Nifty 50 benchmark’s more modest 15 percent rise over the same period.
Company’s Operations and Financials: Primarily engaged in manufacturing and vending wires, cables, and Fast Moving Electrical Goods (FMEG), Polycab India attributes its impressive revenue growth, reaching Rs 4,253, to a notable 27 percent year-on-year increase for the quarter ending September 2023. The company specifically pointed to volume growth in its wires and cables business as a key driver for this revenue surge.
Financial Performance in Q2 FY24: Polycab’s performance in Q2 FY24 showcased a consolidated net profit surge of 58.5 percent year-on-year, amounting to Rs 436.89 crore. Further analysis revealed a 43 percent increase in EBITDA, reaching Rs 608.9 crore, alongside a notable improvement in EBITDA margins, up by 160 bps year-on-year to 14.4 percent. The company attributes these positive trends to a favorable product mix and enhanced operating leverage. Additionally, the FMEG business noted an 8 percent year-on-year growth, while the switches business witnessed a doubling of sales growth owing to favorable base effects.