This multibagger stock has risen 120% this year. Centrum sees over 35% upside
Premium- The brokerage firm sees further upside on the multibagger stock as it has a Buy recommendation on the same
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Shares of Polycab India has given multibagger return this year (year-to-date) so far as the stock is up over 120% in 2021 whereas it has surged 141% in the year's period. From ₹945 per share level in October last year, the multibagger stock currently trades around ₹2,290 per share.
Brokerage firm Centrum sees further upside on the stock amid robust revenue growth as it has a Buy recommendation with a target price of ₹3,110 per share (a potential upside of over 35% from current levels).
“Wires & Cables sales grew 44% YoY to Rs26.3 bn, largely value-led. Growth was broadly uniform across both cables & wires category; however, Cables faced intense competition due to suboptimal demand environment," the note stated.
Pressure on margins was due to a lag in taking price hikes in B2B orders. EBIT margin in H2FY22 is likely to be at the lower end of 11%-13% guided range, but is expected to bounce back in FY23E, Centrum further added.
“POLYCAB will prioritize market share gain in FY22 vis-à-vis margin expansion. We have marginally revised our earnings estimates," it said.
Polycab is a leading player in wires and cable and its product offering includes fans, LED lighting, luminaries, switches, solar products and accessories. The consolidated net profit of the company for Q2 declined 9.4% to ₹200.52 crore for the September 2021 quarter. The company's net profit stood at ₹221.55 crore during the corresponding period of 2020-21.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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