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INVESTMENT INSIGHTS

Check Before You Invest : Polycab India Ltd

BSE: 542652 NSE: POLYCAB ISIN: INE455K01017
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Cable

Snapshot

Q.1 Which industry/sub-sector does Polycab India Ltd belong to?
Polycab India Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Cable segment.
Q.2 Is Polycab India Ltd a good quality company?
Polycab India Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Polycab India Ltd undervalued or overvalued?
Polycab India Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 51.8 44.20
Price to Book 11.53 10.11
Price to Sales 4.79 4.36
EV to EBITDA 32.45 29.15
Q.4 Is Polycab India Ltd a good buy now?
Polycab India Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Polycab India Ltd?
Polycab India Ltd revenue growth is 24.2% for FY-2025, which is above its 5-year CAGR of 20.47%, indicating faster growth.

Q.2 Gross Profit margin of Polycab India Ltd?
Polycab India Ltd Gross profit margin which is the profit after deduction of direct costs, is 13.4% for FY-2025, which is in line with its 5-year median of 13.5%, indicating stable margins.

Q.3 Operating Profit Margin of Polycab India Ltd?
Polycab India Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 13.23% for FY-2025, which is in line with its 5-year median of 13.11% indicating stable margins.

Q.4 Net Profit Margin of Polycab India Ltd?
Polycab India Ltd Net Profit Margin is 9.13% for FY-2025, is in line with its 5-year median of 9.13%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 13.4 13.5
Operating Profit Margin (%) 13.23 13.11
Net Profit Margin (%) 9.13 9.13

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Polycab India Ltd?
Polycab India Ltd Return on Asset is 15.85%, which is in line with its 5-year historical median of 15.24%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Polycab India Ltd?
Polycab India Ltd Return on capital employed is 31.52% for FY-2025, which is above its 5-year historical median of 28.65%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Polycab India Ltd?
Polycab India Ltd Return on equity is 22.93% for FY-2025, which is above its 5-year historical median of 21.18%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Polycab India Ltd?
Polycab India Ltd Cash conversion cycle is 75 days, below its 5-year historical median of 79 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.74 1.68
ROE (%) 22.93 21.18
ROCE (%) 31.52 28.65
Cash Conversion Cycle 75 days 79 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Polycab India Ltd?
Polycab India Ltd Debt-to-Equity ratio is 0.01, which is lower the industry average of 0.52, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Polycab India Ltd?
Polycab India Ltd Debt to cash flow from operations is 0.06, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Polycab India Ltd?

Q.1 Promoter shareholding and pledge status of Polycab India Ltd?
Promoters hold 61.50% of the Polycab India Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Polycab India Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Polycab India Ltd vs industry peers?
Polycab India Ltd revenue CAGR is 20.47%, compared to the industry median CAGR of 20.47%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 24.2 20.5
Gross Profit Growth (%) 15.2 20.6
Operating Profit Growth (%) 18.8 21.1
Net Profit Growth (%) 13.5 21.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.74 1.68
ROE (%) 22.93 21.18
ROCE (%) 31.52 28.65
Cash Conversion Cycle (days) 74.93 79

Valuation & price assessment

Q.1 Stock return of Polycab India Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 41.49% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 - 41.5% 39.1% 55.2%
Q.2 Valuation ratios of Polycab India Ltd vs historical?
The current P/E ratio of 51.8 is higher than its historical median of 44.20, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 51.8 44.20 28.85
Price to Book 11.53 10.11 2.59
Price to Sales 4.79 4.36 1.29
EV to EBITDA 32.45 29.15 12.65

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