Polycab shares with zero debt, 20% profit CAGR are stuck in bear grip; time to buy?

Shares of Polycab India are stuck in the bear grip amid a decent set of Q3 earnings. The FMEG stock delivered losses to shareholders in a period up to six months with marginal one-year returns of 5%. The stock is in a downtrend in terms of simple moving averages in both short and long term. On the other hand, Polycab India has zero debt on books and a net profit CAGR of 20% in five years. The stock delivered multibagger returns of 150% in three years and 437% in five years. 

The FMEG stock was trading 2.26% lower at Rs 6913.65 on Wednesday against the previous close of Rs 7073.80. Total 0.26 lakh shares of the firm changed hands amounting to a turnover of Rs 17.93 crore. Market cap of the firm stood at Rs 1.03 lakh crore in the current session.  

Polycab India shares stand lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 200 day moving averages. The FMEG stock is neither overbought nor oversold on charts, indicates its RSI of 38.

However, the multibagger stock has gained 51.27% from 52-week low of Rs 4557.45 on February 28, 2025. 

Elara Capital has a price target of Rs 8,180 on the Polycab stock with an 'accumulate' rating. Citing the hike in price target, the brokerage said it remains positive on domestic demand led by capex, along with surging copper prices, resulting in average selling price (ASP) rise, strong lead over the No. 2 
C&W firm in top line, huge capex plan to enable growth, and Fast Moving Electric Goods (FMEG)
profitability. 

Elara expects an earnings CAGR of 23% during FY25-28E with an average ROE and ROCE of 24% and 25% during FY26-28 estimates. 

Brokerage Nuvama has raised its price target to Rs 9240 from the earlier Rs 9070 post Q3 earnings. 

"We are raising FY26–28E EPS by 2–4% to reflect strong beat on revenue growth in the C&W segment. We reckon revenue/EBITDA/PAT CAGR of 23%/22%/21% over FY25–28," said Nuvama. 

The brokerage believes Polycab shall continue its industry leading performance. We reckon revenue/EBITDA/PAT CAGR of 23%/22%/21% over FY25–28E, valuing the stock at 40 times on Dec-27 estimates. It has maintained a 'buy' call on the stock. 

Polycab Q3 earnings 

In the previous quarter, net profit rose 35% to Rs 620 crore against Rs 460 crore in the corresponding quarter of the previous fiscal. Revenue in Q3 climbed 46% to Rs 7640 crore from Rs 5230 last year. Operating EBITDA rose 34.17% to Rs 966 crore against Rs 720 crore on  a year-over-year basis. However, PAT margins fell to 12.70% from 13.80% a year ago. 

Polycab India Limited is the country's largest manufacturer of wires and cables. The company's business operations span across India through 23 manufacturing facilities, 15 plus offices and 25 plus warehouses.