Sharekhan's research report on Polycab India
Polycab reported good performance across segments, leading to healthy revenue growth along with stable margins despite commodity headwinds leading to 20% y-oy- growth in net profit, which is slightly better than estimates. Broad-based recovery across regions seen, wherein B2C demand has sharply recovered with sentiment improvement, construction activity has picked up, and private sector investment has picked up resulting in pickup in B2B business, which bodes well for the company. Polycab’s strong balance sheet and net cash position provide comfort in the present environment. The company’s strong focus on its distribution currently at 4,000 dealers/distributors will help deepen its presence in semi-urban and rural markets.
Outlook
We retain Buy on Polycab India Limited (Polycab) with an unchanged PT of Rs. 1,530, given the improvement in demand in underlying user-industries.
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