Mumbai-based brokerage Nuvama has reiterated its bullish stance on Polycab India, raising the target price for the company's stock based on strong performance and growth prospects. The analysts at Nuvama noted that Polycab has shown impressive growth in recent quarters, with significant Compound Annual Growth Rates (CAGRs) in revenue, Ebitda, and profit after tax from FY19 to FY24.
One of the key factors contributing to the increased target price is Polycab's leading position in the cables and wires segment, with an 18% CAGR over a certain period. Analysts believe this growth trajectory is likely to continue due to robust demand and planned capital expenditures. Despite challenges faced by the FMEG segment in the past, analysts foresee a turnaround by FY26, driven by product realignment, new developments, and pricing strategies.
While acknowledging potential risks such as a slowdown in capital expenditure and weakness in consumer markets, Nuvama remains optimistic about Polycab's prospects. The company's strategic investments, focus on long-term sustainability, and plans to achieve Project LEAP goals ahead of schedule indicate a commitment to future growth and market expansion.