Polycab share price: What makes this cable stock a good bet in its category? Brokerages see up to 45% upside in one year

On back of an aggressive growth plans and a boost from the government's spending on infrastructure, cables and electricals stock Polycab India has the potential to show a good upside from current levels, say brokerages.  

Global brokerage firm Jefferies believes despite multiple headwinds, the cable company has gained a 200-basis points market share, which makes it a good buy.  

Jefferies maintained a buy on Polycab India with a target price of Rs 3325 on the counter, which translates into upside of 45.5% on Monday's closing price of Rs 2258.35.  

"The company has been able to pass on the rising prices, which will help the company register growth in profit going forward, " said the global brokerage.  

As per domestic brokerage Sharekhan, Polycab is well-poised to benefit from government infrastructure investments, revival in housing demand, pick up in construction and increase in private capex spending.  

"The company sees healthy volume traction across categories and expects healthy topline in the near to medium term. OPM is expected to improve on account of operating leverage, premiumisation and calibrated pricing hikes," Sharekhan said in its report. 

The focus on increasing exports and scaling up of FMEG business with new product launches would be other key growth triggers, it said.  

It believes the company is on a healthy growth trajectory, owing to its leadership position and a strong product portfolio both in the W&C and FMEG segments and strong distribution and in-house manufacturing capabilities. 

Sharekhan maintained a buy call with a target price of Rs 3000 per share.  

Share of Polycab were trading with marginal cuts in Tuesday's intraday trade at Rs 2243.75 per share on the BSE. The stock traded on 52-week high value of Rs 2,820.05 on April 22, and touched a year low value of Rs 1,761.25 on July 29 last year. Despite volatility, Polycab has yielded a return of around 15% in the past one year as on June 28.