POLYCAB - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.6

📊 Fundamental Analysis

Polycab India Ltd shows strong fundamentals and long-term growth potential

ROE (21.4%) & ROCE (29.7%): Excellent capital efficiency, indicating strong profitability and management effectiveness.

PEG Ratio (1.61): Slightly above ideal (<1), but still acceptable for a high-growth company.

Debt-to-Equity (0.02): Virtually debt-free, which enhances financial stability.

Dividend Yield (0.50%): Low, but typical for growth-oriented companies reinvesting profits.

EPS (₹147): Strong earnings per share, supporting valuation.

Industry PE (30.3) vs Stock PE (47.3): Indicates overvaluation, but justified by superior growth and margins.

📈 Technical & Valuation Insights

Current Price: ₹6,962

52W High/Low: ₹7,607 / ₹4,555

DMA 50 / DMA 200: ₹6,471 / ₹6,153 — trading above both, indicating bullish momentum.

RSI (62.6): Near overbought zone, but not extreme.

MACD (142): Positive, confirming upward trend.

Volume: Slightly above weekly average, showing sustained interest.

🎯 Ideal Entry Price Zone

Given the elevated PE and RSI, a more attractive entry would be

₹6,200–₹6,500: Near DMA levels and below current price, offering better risk-reward.

₹5,800–₹6,000: Strong buy zone if broader market corrects or stock consolidates.

🧭 Exit Strategy / Holding Period

If you already hold Polycab

Holding Period: Minimum 3–5 years to benefit from infrastructure tailwinds, FMEG expansion, and export growth.

Exit Strategy

Partial Profit Booking: Near ₹7,600–₹8,100 (analyst targets) if valuations stretch further.

Full Exit: Only if ROE/ROCE deteriorate below 15% or PEG rises above 2.5 without earnings growth.

Trailing Stop-Loss: Consider a dynamic stop-loss below 200 DMA (~₹6,150) to protect gains.

🚀 Long-Term Growth Catalysts

FMEG Segment: Growing faster than core business, improving margins.

Export Expansion: Presence in 84 countries, leveraging India’s manufacturing edge.

Government Infra Push: Smart Cities, renewable energy, and electrification projects.

Strong Brand & Distribution: Market leadership in wires and cables with pricing power.

Would you like a comparison with peers like KEI or Havells to see how Polycab stacks up?

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