(Reuters) -Polycab India reported a bigger-than-expected second-quarter profit on Friday, benefiting from strong demand in its mainstay wires and cables segment amid robust infrastructure spending.
The company’s consolidated net profit rose about 56% to 6.85 billion rupees ($77.89 million) in the three months ended September 30.
Analysts had expected a profit of 5.59 billion rupees on average, according to data compiled by LSEG data.
Revenue from operations rose around 18% to 64.77 billion rupees, beating analysts’ estimate of 61.16 billion rupees. Expenses climbed about 12%.
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KEY CONTEXT
India’s wires and cables industry continues to see strong growth momentum, led by government and private sector spending on infrastructure and the booming real estate sector.
Polycab, among the top players in the segment, commands pricing power and has been able to seize market share, analysts at Ambit Capital said in a note.
The company has been expanding its distribution in smaller cities, where there is more scope to win business from unorganized players, Polycab had said in prior earnings calls.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBI Price/ Revenue Profit Mean No. of Stock to Div
TDA Sales growth (%) growth (%) rating* analyst price yield
s target** (%)
Polycab India 41.36 28.35 3.82 19.18 21.26 Buy 28 1.00 0.46
Havells India 49.54 32.54 3.66 12.36 18.27 Buy 24 0.86 0.68
R R Kabel 30.94 19.28 NULL 15.47 26.77 Buy 8 0.82 0.55
KEI Industries 41.77 27.94 NULL 20.28 23.13 Buy 14 0.93 0.10
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY TO SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.9400 Indian rupees
(Reporting by Ananta Agarwal in Bengaluru and Praveen Paramsivam in Chennai; Editing by Eileen Soreng)
