Polycab Share Price: Despite the excellent Q1 results of Polycab, the share has fallen 3% to ₹ 8,888 due to profit booking. The leading brokerage firm has given a big target on the stock.
Polycab Share Price Target: Shares of Polycab India, a giant manufacturing company of cable and electrical goods (FMEG), have seen a decline of more than 3% in early trade today. The company has released its first quarter (Q1) results, after which the stock slipped to ₹8,888 from its previous closing price of ₹9,216.10. Due to this decline, the market cap of the company has also decreased to ₹ 1.35 lakh crore. If you invest in the stock market and are nervous seeing this decline, then there is a relief news for you. Global brokerage house believes that this is a great opportunity to buy shares cheaply. At the current price, each share can give a profit of ₹ 2,100 to ₹ 2,200.
Polycab Share: Results superhit, yet why did the share fall?
The company’s total revenue in the first quarter has increased by 39% year-on-year to ₹8,209 crore. It was ₹5,906 crore in the same quarter last year. The company’s operating profit (EBITDA) has also jumped by 32.5% to reach ₹1,136 crore. Sales of the company’s core wire and cable business grew 38% to ₹7,202 crore, while its profit increased to ₹959 crore from ₹756 crore last year. But if we look at the stock, there was a strong rise of 21% in the last one month. When a stock moves so fast, after the results are out, some investors book their profits, causing the stock to fall slightly.
Why are brokerage houses crazy about Polycab shares?
Jefferies gave the highest target of ₹ 11,100
Global brokerage firm Jefferies has given a ‘buy’ rating on Polycab and the highest target of ₹ 11,100. If you buy shares now at ₹8,888 and it reaches Jefferies’ target of ₹11,100, you can make a huge profit of ₹2,212 on each share. The brokerage says that despite the tension in the Middle East, the company’s cable-wire and FMEG (fans, lights etc.) sales have increased by 39% and 71%, which is a big thing.
Nuvama increases target to ₹10,510
Brokerage house Nuvama has also described the company’s results as better than expected. According to Nuvama, the company’s revenue and profit growth have been far ahead of their expectations. In view of this, he has directly increased his target price from ₹ 9,740 to ₹ 10,510 and has maintained the advice of ‘BUY’.
HSBC gave target of ₹10,160
HSBC has also expressed confidence in the stock and given a target of ₹ 10,160. He believes that due to strong demand in the market and the company’s rapid expansion into new areas, its profits will continue to increase in the coming years.
What should you keep in mind?
While on one hand the experts have assured of bumper earnings, on the other hand they have also expressed a small caution. According to HSBC, if the prices of raw metals like copper and aluminum suddenly fluctuate significantly in the coming time, it may have a slight impact on the company’s margins. In this quarter too, the company’s EBITDA margin declined slightly by 0.70% (70 basis points) to 13.8%. The fundamentals of Polycab are very strong and the big targets of the brokerage house are clearly indicating that today’s small fall can be an opportunity for long term investors to take entry at a cheap price.
Disclaimer: Investing in the stock market is subject to market risks. The target price and figures given in the article are based on brokerage reports and quarterly results. This is not a direct advice from our side to buy or sell shares. Before making any investment, please consult your certified financial advisor.