Polycab India Ltd (PIL) manufactures and sells a diverse range of wires & cables. The
company’s key products in the wires & cables segment include power cables, control
cables, instrumentation cables, solar cables, building wires and flexible cables. In the
year 2009, the company diversified into engineering, procurement and construction
(EPC) business. Further, it also ventured into fast moving electrical goods (FMEG)
segment in 2014 and started offering products such as electric fans, LED lighting &
luminaires, switches & switchgears, solar products & conduits and accessories. The
company has 24 manufacturing facilities, including two joint ventures.
Outlook & Valuation: In terms of valuations, the pre-issue P/E works out to 16.7x its
FY2019 annualized earnings (at the upper end of the issue price band), which is slightly
lower compared to its peers like Finolex Cables (20.7x) & Kei Industries (20.x). Further,
Polycab’s market leadership position in wires & cables segment, diversified product
portfolio, strong distribution network & brand recall and proven financial track record
are the key positives. Given the above favorable factors, we recommend Subscribe to
issue.
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