Polycab Share Price Rose by 65% from January Lows to Hit New Highs

Polycab India share price surged 65% to a fresh all-time high of ₹6,242 from a low of ₹3,801 in January when the stock grabbed headlines after an IT raid of multiple offices of the Polycab Group. However, Polycab India share price witnessed strong buying interest today after the company announced its Q4 2024 results.

Polycab India Ltd beat street estimates and posted an all-time high annual and quarterly revenue and profitability in its Q4 results for FY2023-24. This positive financial performance, along with the company's strong market position and growth prospects, prompted the purchase of Polycab stock. The stock rose from ₹5,815 a share to ₹6,060 apiece on the NSE within 30 minutes of Polycab's results announcement.

In January, after the news of the IT-raid made the rounds, the stock fell nearly 21% following which the stock has continued an upward spree as investors trained their focus on the company’s fundamentals and the general industry uptrend.

Polycab India on Friday reported a 29% year-on-year (y-o-y) rise in consolidated net profit at ₹553 crore compared to ₹428 crore in the year-ago period. The company's operating revenue also jumped 29% year-on-year to ₹5,592 crore from ₹4,324 crore in the corresponding period last fiscal.

Earnings before interest, taxes, depreciation and amortization (EBITDA) margin, a measure of the company's operating profitability, improved nearly 50 basis points (bps) quarter-on-quarter (QoQ) to 13.6% on better operating leverage and lower advertising and promotion spending ( A&P).

The company has gained significant market share in the domestic W&C industry and has consolidated its position as the leading W&C manufacturer in India. International trade revenues contributed 8.0% to consolidated revenues. The company expanded its global presence to 79 countries and its FMEG business grew by a slight 3% year-on-year. The segments of switches, switchboards and pipelines saw significant growth during the year.

Polycab India has also recently recommended a dividend of ₹30 per share of par value of ₹10 each for financial year 2024. This will result in a dividend payout of 300%. The decisive date for the dividend will be announced shortly. The dividend, if approved by the shareholders at the following ordinary general meeting, will be paid no later than 30 days after the day of the ordinary general meeting.

Indian brokerage YES Securities says, "FMEG should see moderate growth on back of slower demand for FMEG products and price erosion in lighting. Ebitda margins is also expected to remain flat on YoY basis. Polycab continues to gain valuable market territory due to its aggressive marketing, a wide product portfolio and easy access to its products.”

Inder T Jaisinghani, Chairman and Managing Director at Polycab India mentioned after the Q4 annoucements, "This outstanding performance is a direct result of our steadfast focus over the years on key areas such as expanding our distribution network, enhancing manufacturing capabilities, and striving for operational and organizational excellence."