Polycab India shares fall over 5% on reports of Income Tax Department raids at 50 company locations
Polycab India declined over 5 percent in intra-day deals on Friday following searches conducted by the Income Tax Department's investigation wing at nearly 50 locations connected to the company across the country. Reports indicate that residences and offices of top management associated with the cables and wire manufacturer were also subject to raids. The specific reasons behind the Income Tax Department's searches and the nature of the investigation remain unclear at this point.
Bombay Stock Exchange has also sought clarification from the firm regarding these raids. The stock fell as much as 5.2 percent to it's day's low of ₹5,326. Despite this setback, the stock had seen remarkable growth, surging by 109 percent over the past year and 113 percent in 2023.
Over a three-year period, the shares of this wire and cable maker had delivered substantial returns, showcasing a growth of 449 percent. It had hit its record high of ₹5,733, earlier this month on December 12 and has soared over 129 percent from its 52-week low of ₹2,500.25, hit on December 26, 2022. The cables and wire maker reported a 59 percent rise in September quarter profit at ₹426 crore.
Profit for the September 2022 quarter stood at ₹268 crore. Meanwhile, its revenue grew 26.5 percent to ₹4218 crore in Q2 against ₹3332 crore in the September 2022 quarter. Polycab's EBITDA in Q2 FY24 jumped 43 percent on-year to ₹608.9 crore, and EBITDA margin improved 160 bps YoY to 14.4 percent.
The company reasoned favourable product mix and better operating leverage for the increase in margins. Polycab manufactures and sells cables & wires (C&W), and fast moving electric goods (FMEG) products. It also executes limited engineering, procurement, and construction projects.
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