Brokerages bullish on this cable stock; Shares could deliver up to Rs 2,200 profit per scrip – Do you own?

Brokerages remained largely positive on Polycab India Ltd after the company reported its quarterly performance, with several firms raising target prices and pointing to strong volume-led growth, despite margin pressures in the cables and wires (C&W) segment.

Polycab India shares were trading at Rs 7,411.25, up Rs 280.30 or 3.93 per cent, on Monday.

Polycab India Share Price Movement

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Polycab India shares have traded in a wide range over the past year, with a 52-week high of Rs 7,947.35 and a 52-week low of Rs 4,557.45. The company has a full market capitalisation of Rs 1,11,449.65 crore and is part of the BSE 200 index.

Polycab operates in the cables and electricals segment. The stock has declined 2.93 per cent over the past week and 0.47 per cent in the last month.

However, it has gained 6.76 per cent over the past six months and is up 9.18 per cent on a one-year basis. Over longer periods, the stock has delivered strong returns, rising 161.65 per cent over three years and 515.51 per cent over the past five years.

Polycab India Share Price Target

HSBC maintained a ‘buy’ rating on the stock and raised its target price to Rs 8,900 from Rs 8,600. At the current market price, this implies an upside of about Rs 1,489, or nearly 20 per cent.

Morgan Stanley reiterated an ‘overweight’ rating and raised its target price to Rs 9,659 from Rs 9,373. This suggests a potential upside of around Rs 2,248 per share, or about 30 per cent from current levels.

Goldman Sachs maintained a ‘neutral’ rating and raised its target price to Rs 7,930 from Rs 7,130, indicating an upside of about Rs 519, or around 7 per cent.

Growth Drivers and Segment Performance

Morgan Stanley said adjusted profit after tax was in line, while C&W revenue rose 54 per cent year-on-year, driven by strong volume growth of about 35 per cent and commodity inflation.

Citi maintained a ‘buy’ rating and raised its target price to Rs 9,500 from Rs 9,200. This implies a potential upside of about Rs 2,089, or roughly 28 per cent. Citi noted that the company reported 54 per cent year-on-year growth in the C&W segment, the highest since the Covid period, led by around 40 per cent volume growth.

Jefferies also maintained a ‘buy’ rating but marginally cut its target price to Rs 9,225 from Rs 9,230. The revised target suggests an upside of about Rs 1,814, or nearly 25 per cent.

Margin Pressure and Management Commentary

Brokerages flagged pressure on C&W margins during the quarter, as the company chose not to fully pass on higher commodity costs to protect demand and market share. Margins declined to around 12.2 per cent, lower than estimates.

However, management indicated that growth momentum remains strong in the March quarter and that price hikes have already been implemented in January, with more planned to support margin recovery on a quarter-on-quarter basis.