POLYCAB - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 19 Sept 25, 2:16 pm

Investment Rating: 4.5

⚡ Long-Term Investment Analysis: Polycab India Ltd (POLYCAB)

Polycab is a dominant player in wires, cables, and fast-growing FMEG (Fast-Moving Electrical Goods) segments. Its fundamentals reflect a high-quality business with strong growth, profitability, and minimal debt — making it a compelling long-term investment.

✅ Strengths

Exceptional Profitability

ROCE: 29.7%

ROE: 21.4%

These metrics indicate efficient capital deployment and strong shareholder returns.

Robust Earnings

EPS: ₹145

PAT Qtr: ₹568 Cr. despite a sequential dip — YoY growth remains strong.

Low Leverage

Debt-to-equity: 0.01 — virtually debt-free.

Valuation Support

PEG Ratio: 1.58 — fair relative to growth.

P/E: 51.4 vs Industry PE: 29.1 — premium justified by brand strength and growth.

Technical Momentum

RSI: 68.8 — nearing overbought, but MACD positive.

Price near all-time high — strong bullish trend.

Institutional Confidence

FII: +0.34%

DII: +0.66% — consistent accumulation.

📈 Ideal Entry Price Zone

Zone Price Range Rationale

Value Buy Zone ₹6,400–₹6,700 Near DMA 200 and below RSI resistance

Accumulation Zone ₹6,700–₹7,000 If supported by volume and earnings clarity

Avoid Buying Above ₹7,500 Unless backed by breakout earnings or margin expansion

🧭 Exit Strategy & Holding Period

Holding Period

5+ years to benefit from FMEG expansion, rural electrification, and export growth.

Exit Triggers

ROE drops below 15% for 2+ quarters

PEG rises above 2.5 without EPS growth

Price crosses ₹7,600–₹7,800 without earnings support — consider partial profit booking

Sustained margin compression or slowdown in FMEG segment

Rebalancing Tip

Track quarterly revenue mix between wires/cables and FMEG. A rising share of branded consumer products could drive valuation re-rating.

Would you like a comparison with peers like Havells, KEI Industries, or Finolex to assess sector positioning?

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