Multibagger FMEG stock zoomed 400% in three years; hit record high in previous session

Shares of multibagger Polycab India Ltd are in focus today after the fast-moving electrical goods (FMEG) firm reported its Q1 earnings. Polycab India stock, which closed at Rs 822.2 on July 17, 2020 ended at Rs 4127.90 in the previous session, delivering 402% returns during the period. An amount of Rs 1 lakh invested in the shares of multibagger Polycab India three years ago would have turned into Rs 5.02 lakh today. In comparison, Sensex has risen 80.43 per cent during the period.  

In the last session, the stock closed 5.52% higher at Rs 4127.90 on BSE. Total 0.88 lakh shares of the firm changed hands amounting to a turnover of Rs 35.65 crore on BSE. Market cap of the firm rose to Rs 61,862 crore on Tuesday.                 

In terms of technicals, the relative strength index (RSI) of the stock stands at 73.8, signaling the stock is overbought. Polycab India has a one-year beta of 0.7, indicating low volatility during the period. Polycab India shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.        

The stock has climbed 91.64% in a year and risen 60.01% in 2023.  

The wires and cables maker reported a 81.68% rise in profit at Rs 399.27 crore for the June 2023 quarter against Rs 219.76 crore profit in the corresponding quarter of previous fiscal. Sales climbed 42.13% to Rs 3889.38 crore in Q1 of this fiscal against Rs 2736.56 crore in the June 2022 quarter. 

Here’s a look at what experts said on the outlook of the stock. 

Abhijeet from Tips2Trades said, "Polycab stock price is overbought on the daily charts with a strong resistance at Rs 4337. Investors should book profits at current levels as a close below support of  Rs 3910 could lead to Rs 3500 in the near term."

Rohan Shah - Technical Analyst, Religare Broking said, “The stock has rallied almost 18% in the last 6 sessions and is currently trading at all time high levels. 

On the technical front, the rally looks quite stretched now, as the momentum indicators are placed in the deep overbought territory and prices are trading too far away from its short term averages. Thus, at this juncture it’s not prudent to create fresh longs and short term traders shall look to book profits at this level as price may witness profit booking and drag price lower till Rs 4000-3950.

Polycab India Limited is the country's largest manufacturer of wires and cables and one of the fastest growing FMEG companies with a consolidated turnover of Rs 122 billion in FY22. The company's business operations span across India through 23 manufacturing facilities, 15 plus offices and 25 plus warehouses. 

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