Multibagger Alert: This leading wires and cables manufacturer has given investors 164% in the past year!

Multibagger Alert: This leading wires and cables manufacturer has given investors 164% in the past year!

by 5paisa Research Team Last Updated: 2022-04-04T13:18:04+05:30

On a YTD basis, the stock has given a return of 123%.

The stock of India’s largest manufacturer and seller of cables and wires, Polycab India has given investors stellar returns of 164.72% over the last year. The share price stood at Rs 883.45 on October 23, 2020, and since then, the stock has more than doubled investor wealth.    

Wire and cables manufacturer Polycab India’s revenues jumped strongly in the second quarter as the economic recovery from the coronavirus bolstered demand across all markets and product categories. The company’s top-line grew by 48.03% to Rs 3128.83 crore from Rs 2113.68 crore in Q2FY21. Total expenditures in comparison grew by 56.89% to Rs 2825.98 crore during the same period because of the higher raw material expenses. Due to higher increase expenditure in comparison with revenue, the operating profit of the company declined by 4.63% YoY to Rs 329.24 crore during the quarter. PAT stood at Rs 200.84 crore, down 9.46% YoY.

Given its scale and size, Polycab India is building on market share gains through the expansion of its distribution network and by increasing ad spending. The company’s retail share of revenue has increased from 30% to 40% led by strong growth in the Fast-moving electrical goods (FMEG) business, which it started in FY14. Meanwhile, the increasing pace of project execution in infrastructure and construction on a sequential basis is supporting revenue on the institutional side. In the export market, the company has a healthy order pipeline from the US, Australia and other markets.

Wires and cables play a vital role in every aspect of infrastructural growth and have extensive usage across many industries. The growing demand for power, light and communication has kept demand high for cables and wires which constitute 40% of India’s electrical industry. Currently, around USD 38-40 billion of cables are imported from various countries. Favourable government initiatives and reforms to promote indigenous manufacturing, foreign investments, renewable energy and pan-India digital connectivity ensure that the prospects of the wires and cables industry and thereby Polycab India remain bright.

Polycab is India’s largest manufacturer and seller of an extensive range of cables and wires, and a fast-growing player in the fast-moving electrical goods (FMEG) industry, along with an established export presence.

At 12.10 pm on Tuesday, the stock is trading at Rs 2314.35, down by 1.04% or Rs 24.30 per share as against a 0.03% gain in the benchmark index. The 52-week high of the scrip is recorded at Rs 2,647.40 and the 52-week low at Rs 900 on the BSE.

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