(Reuters) -Polycab India reported a bigger-than-expected first-quarter profit on Thursday, boosted by steady demand for its wires and cables, supported by high infrastructure spending across key sectors.
The company’s consolidated net profit rose 49.5% to 5.92 billion rupees ($68.87 million) in the three-month period ended June 30. Analysts, on average, had expected a profit of 5.14 billion rupees, according to data compiled by LSEG.
Its revenue from operations rose nearly 26% to 59.06 billion rupees, beating analysts’ estimates of 56.15 billion rupees.
In comparison, expenses grew about 23%.
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KEY CONTEXT
In the wires and cables segment, demand across sectors remains robust, driven by high government expenditure, especially in sectors such as power transmission.
The Indian government has outlined an investment of 9.2 trillion rupees in power transmission infrastructure by FY 2032, which will require high-voltage power cables. Polycab said in a press release that cables growth outpaced wires in the domestic segment.
While competitive intensity in the segment remains high, Polycab has been able to gain market share from larger and unorganized players, analysts have said.
Polycab also benefited from strong demand in its electrical goods segment, where sales grew 18% year-on-year, with products like lights, switchgears and conduit pipes and fittings seeing steady demand from the real estate sector, the company said.
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 41.54 28.38 3.16 17.49 17.99 Buy 28 1.04 0.50
R R Kabel 35.98 22.37 16.50 29.99 Buy 9 0.92 0.50
Havells India 50.36 33.64 3.78 13.53 20.01 Buy 25 0.86 0.66
V Guard Industries 39.19 26.46 13.34 22.78 Buy 17 0.91 0.38
* 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
APRIL TO JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 85.9570 Indian rupees
(Reporting by Ananta Agarwal in Bengaluru; Editing by Sherry Jacob-Phillips)