Polycab Q3 Results Review: Systematix Maintains 'Buy' On The Stock, Lowers Target Price — Here's Why

Polycab has charted its five-year growth strategy via Project Spring. In cable and wires Polycab aims to grow 1.5x of the industry growth (which is expected to be ~1.5x of India’s GDP growth)..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Systematix Research Report.Polycab India Ltd.’s Q3 revenue/Ebitda/PAT grew 20%/26%/11% YoY. Revenue growth was led by FMEG (up 43% YoY) and EPC (up 101% YoY) while C&W revenue grew by a lower 12% YoY (versus 20%+ growth for KEI and 7% growth for Havells). The Ebitda margin stood high at 13.8% (up 65 bps YoY and 229 bps QoQ), aided by normalization in wires margin and lower losses in FMEG. With the rising trend in copper prices, management expects wire sales to rebound in Q4. Cable sales continue to be strong. The company has charted its five-year growth strategy via Project Spring. In cable and wires Polycab aims to grow 1.5x of the industry growth (which is expected to be ~1.5x of India’s GDP growth). Ebitda margin is sustainable in the 11-13% range. In FMEG, it aims 1.5-2x of industry growth with 8-10% Ebitda margin. A total capex of Rs 60-80 billion, dividend payout ratio of 30%+ and export mix of 10%+ is also targeted. We cut our earnings estimates for FY26E/27E by 3-5% owing to slightly lower margin estimates. We now expect 17%/16%/15% CAGR in revenue/ Ebitda/PAT over FY24-27E (FY19-24: 18%/21%/29%), with RoIC of 38%, RoCE of 30%, and likely strong FCFs (~Rs 10 billion annually). We remain structurally positive on the C&W industry and Polycab’s prospects. Maintain Buy with a target price of Rs 7,618 (42 times FY27E P/E), earlier Rs 8,597 (45x).Click on the attachment to read the full report:.Polycab India Q3 Results: Profit, Revenue Rise; Share Price Dips.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Polycab Q3 Results Review: Systematix Maintains 'Buy' On The Stock, Lowers Target Price — Here's Why

The brokerage remains structurally positive on the cable and wire industry and Polycab’s prospects.

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Polycab Q3 Results Review: Systematix Maintains 'Buy' On The Stock, Lowers Target Price — Here's Why

The brokerage remains structurally positive on the cable and wire industry and Polycab’s prospects.

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