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Polycab India surges 7% as net profit for September quarter doubles

The company reported net profit of Rs 194 crore in Q2FY20 against Rs 90 crore in a year ago quarter.

SI Reporter  |  Mumbai 

Polycab India surges 7% as Q2 profit more-than-doubles

Shares of surged 7 per cent to Rs 837 on the BSE on in the intra-day deals Thursday after the company's profit more-than-doubled to Rs 194 crore in September quarter (Q2FY20), on the back of strong revenue growth. It had logged profit of Rs 90 crore in the year-ago quarter. At the time of writing of this report, the stock was trading at its highest level since listing on April 16, 2019.

is engaged in the business of manufacturing and selling wires and cables (W&C) and fast moving electrical goods (FMEG) under the “POLYCAB” brand.

The company’s revenue during the quarter grew 24 per cent year-on-year (y-o-y) to Rs 2,242 crore driven by strong growth across segments. The wires and cables business grew 20 per cent to Rs 1,881 crore, while the FMEG (Fast Moving Electrical Goods) business grew 42 per cent to Rs 196 crore in Q2FY20. EBITDA (earnings before interest, tax, depreciation and amortisation) margin improved to 12.1 per cent from 11.9 per cent in the previous year quarter.

According to analysts at SMC Institutional Equities, Polycab’s ability to deliver healthy growth on the back of diversified product portfolio, extensive dealer network, improving brand image and focusing on maintaining cash flows are the key strengths of the company.

“We reckon with huge opportunities in offering by industry, steady performance in W&C segment and improving profitability in FMEG segment, Polycab should be an ideal stock in an investor’s portfolio”, the brokerage firm said in an report. The brokerage firm has initiated coverage on the company with a “BUY” rating and target price of Rs 874 per share.

At 10:35 am, the stock was trading 5 per cent higher at Rs 819 on the BSE, as compared to a 0.06 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped more than three-fold with a combined 862,289 shares changing hands on the NSE and BSE. In the past two weeks, it has rallied 27 per cent against 3 per cent gain in the benchmark index.

First Published: Thu, October 24 2019. 10:38 IST