Rs 848 to Rs 7,711: Multibagger FMEG stock hits record high, time to book profit?

Shares of Polycab India reached their record high on Monday amid a mild selloff in the broader market. Polycab India shares gained 2.16% to a high of Rs 7,711.30 against the previous close of Rs 7548 on BSE. Market cap of the fast-moving electrical goods (FMEG) firm rose to Rs 1.15 lakh crore. Total 9729 shares of the firm changed hands amounting to a turnover of Rs 7.44 crore on BSE.

The stock closed at Rs 848 on September 21, 2020 and has risen 841.39% since then. The multibagger stock has gained 193% in the last three years. 

Polycab India has a one-year beta of 1.1, indicating high volatility during the period.

Polycab India shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages. 

The FMEG stock is overbought on charts, indicates its RSI at 72.8.

Analysts are mostly bullish on the prospects of the wires and cables stock. 

Gaurav Bissa - Senior Vice President at InCred Equities said, "Polycab stock has been in a structural uptrend with consistent formations of higher tops and higher bottoms. It has bounced from a 5-year ascending channel pattern support. Interestingly, the 100 EMA support on weekly charts coincided with the channel support, thereby implying the momentum has picked up and strong upside can be expected in the coming months. Polycab is trading near a major swing resistance and a monthly close above Rs 7600 can push the prices toward Rs 8500 level."

Amruta Shinde, Technical & Derivative analyst, Choice Broking said, "Polycab shares are currently trading at Rs 7,676 and is exhibiting strong bullish momentum. The stock has rebounded decisively from lower levels to register a fresh all-time high of Rs 7,714, forming a classic higher high–higher low structure along with a breakout from a rounding bottom pattern. The recent breakout above the key resistance level near Rs 8,000 strengthens the bullish outlook and opens the door for further upside potential toward the Rs 8,450 level, provided momentum sustains. 

On the downside, immediate support is placed at Rs 7,500, which could serve as an attractive level for accumulation on minor pullbacks. A protective stop-loss is suggested at Rs 7,300 to mitigate risks arising from short-term market volatility.
Given the favourable technical setup, strengthening momentum, and breakout confirmation, traders may consider initiating long positions at current market levels of Rs 7,676, with a near-term target of Rs 8,450."

Ameya Ranadive, Chartered Market Technician, CFTe, Sr Technical Analyst, StoxBox said, "Polycab India has surged nearly 13% in the past month, currently trading at Rs 7,676 after delivering a decisive multi-year breakout to fresh all-time highs. The uptrend, in place since March–April, continues to be reinforced by strong momentum and rising volumes.

The ADX at 19 suggests a trend still gaining traction. Importantly, the MACD line remains well above the signal line, confirming bullish momentum and suggesting further upside potential.

As long as Polycab sustains above Rs 7,500, the breakout remains intact. The near-term upside target is placed at Rs 8,050, supported by strong momentum and favorable technical indicators. Traders are advised to ride the trend with a disciplined stop-loss at Rs 7,400, while investors may continue to hold given the robust price structure."

Kunal Kamble, Sr. Technical Research Analyst at Bonanza Portfolio said, "Polycab has been in a strong uptrend and is currently trading near Rs 7,678, marking fresh highs. The stock has broken above previous resistance, reflecting strong momentum. However, the RSI is hovering near overbought territory, indicating that the stock may witness some short-term profit booking or consolidation. 

Fresh buying is advisable on dips rather than at current stretched levels. For existing positions, one can trail stop-loss near the 9 EMA (Rs 7,450–7,500 zone) to protect profits. The stock can head towards Rs 7,950–8,100, provided momentum sustains."

Meanwhile, brokerage Motilal Oswal has a price target of Rs  8130 on the multibagger stock based on 40x Jun’27E EPS).

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.