Shares of Polycab India continued their upward journey, and hit a new high of Rs 1,052, up 5 percent on the BSE on Thursday, on expectation of strong earnings going forward. The company was included in the MSCI Global Small Cap Index with effect from November 26, 2019.
The stock of the fast moving electric goods (FMEG) company zoomed 100 percent from its recent low of Rs 525, touched on August 22, 2019. It was trading at its highest level since its listing on April 16, 2019. The company issued shares at Rs 538 per share in the initial public offer.
In the past two months, the stock has rallied 57 percent after its net profit more-than-doubled to Rs 194 crore in September quarter (Q2FY20) on the back of strong revenue growth. It had logged profit of Rs 90 crore in the year-ago quarter. In comparison, the S&P BSE Sensex was up 8.5 percent during the same period.
Besides, the bottom-line got an additional boost on the back of lower tax rates due to re-measuring of deferred tax assets/liabilities. The company’s revenue during the quarter grew 24 percent year-on-year (y-o-y) to Rs 2,242 crore driven by strong growth across segments. The FMEG products of Polycab largely include switchgears, fans, lightings & luminaires and solar pumps.
Going forward, the management said it remain committed to delivering consistent and profitable growth.
“The FMEG segment is expected to maintain strong revenue growth trajectory, led by leveraging distribution strength and launch of new products within existing categories. Rising cash flows with each passing year may lead to upward revision in capital expenditure along with probability of higher shareholder returns through dividends”, analysts at Sharekhan said in a note.
At 11:00 am, the stock was trading 4 percent higher at Rs 1,031 on the BSE, as compared to a 0.32 percent rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 500,500 shares changing hands on the NSE and BSE till the time of writing of this report.―Business Standard