ICICI Direct: Polycab India Reports Satisfactory Performance In Q1 Amid Lockdown

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Direct Report.Polycab India Ltd. reported a satisfactory performance amid the Covid-19 induced lockdown in Q1 FY21 wherein it lost almost 40 days of its sales. Consolidated revenue fell 50% YoY in Q1 FY21 led by a similar decline in revenue of its core business i.e. wire and cable. While cable demand remained muted throughout the quarter, the housing wire segment (approximately 45% of total wire and cable segment) witnessed strong double digit growth in June led by pent up demand and pre-stocking due to price hike.Despite such a challenging scenario, gross margins increased approximately 50 basis points YoY while Ebitda margin was at approximately 6% (down approximately 560 basis points YoY), mainly due to low operating leverage. The management has indicated at demand improvement on a month on month basis post relaxation of lockdown. While the plant utilisation has reached 50- 60% currently, the company reported a marginal growth in revenue for July 2020 (as on date). The company also increased its focus towards export markets and recorded export revenue growth of 116% in Q1 FY21. The export revenue contribution to total topline increased to 10% in Q1 FY21 versus 2% in Q1 FY20.We maintain our positive stance on the stock, considering Polycab’s strong fundamentals (that will help it to recoup its lost sales swiftly with a recovery in business activities) and stringent working capital management to reduce the risk on the balance sheet. We reiterate Buy with a revised target price of Rs 950 (valuing at 17 times FY22E)..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint. .Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

ICICI Direct: Polycab India Reports Satisfactory Performance In Q1 Amid Lockdown

ICICI Direct: Polycab India Reports Satisfactory Performance In Q1 Amid Lockdown

Choose a plan