Polycab India Shares Plunge Over 5% Amid Income Tax Searches at Multiple Locations

22 Dec 2023 , 02:36 PM

Polycab India witnessed a more than 5 % drop in its shares on December 22 following reports of income tax department searches at 50 locations across India, including residences and offices of top management linked to the company.

The specific reasons behind the Income Tax Department’s searches and the nature of the ongoing investigation are currently undisclosed.

At the time of writing, Polycab shares were trading 4.07 % lower at Rs 5,375 on the National Stock Exchange (NSE). Despite the recent decline, the stock had experienced a remarkable 100 % increase in 2023, doubling investors’ money. In contrast, the benchmark Nifty 50 rose approximately 15 % during the same period.

Polycab India specializes in manufacturing and selling wires, cables, and Fast Moving Electrical Goods (FMEG). The company operates across India through 23 manufacturing facilities, over 15 offices, and more than 25 warehouses.

In the quarter ending September 2023, Polycab India reported a consolidated net profit of Rs 436.89 crore, marking a 58.5 % increase from the previous year. The revenue surged 27 % year-on-year to Rs 4,253, attributed to volume growth in the wires and cables business, which saw a 28 % increase.

Polycab’s EBITDA in Q2 FY24 recorded a 43 % year-on-year increase to Rs 608.9 crore, with the EBITDA margin improving 160 basis points YoY to 14.4 %. The company credited the rise in margins to a favorable product mix and better operating leverage. The FMEG business also experienced an 8 % YoY growth in the quarter, while the switches business witnessed a doubling of sales YoY due to the base effect.

For feedback and suggestions, write to us at [e-mail]