Polycab India Share Price Recovers 3 Percent Following Recent Decline

Polycab India Share Price Recovers 3 Percent Following Recent Decline

VoM News Desk | January 12, 2024 | 10:45 AM IST | Breaking News | Follow on Google News

Polycab India Share Price Recovers 3 Percent Following Recent Decline/Pixabay

Polycab India Share Price Recovers 3 Percent Following Recent Decline

Polycab India, a major electrical wires and cables manufacturer, experienced a rebound in its share price, surging by 3% in early trade to reach ₹4,059 apiece. This recovery comes after the stock witnessed a significant downturn over the past few trading sessions, declining by 28.23% from ₹5,404 apiece to ₹3,878.45 amid reports of tax evasion allegations against the company.

The Ministry of Finance disclosed that the Income Tax Department conducted search and seizure operations at Polycab and its distributors on December 12, 2023, across multiple locations. The preliminary findings suggest instances of unaccounted cash sales, cash payments for unaccounted purchases, and non-genuine expenses for the suppression of taxable income.

Following the tax evasion allegations, Axis Capital lowered its target price on Polycab India to ₹4,300 apiece, trimming the target P/E to 30x December 2025E from 38x September. The uncertainty surrounding the IT raid and potential charges have contributed to the adjustments.

In response to the allegations, Polycab India stated that it had not received any written communication from the IT department regarding the outcome of the December raids and emphasized that there was no material adverse impact on the company’s financial position.

US-based Capital Group, through its affiliate SmallCap World Fund Inc., offloaded 8,51,003 shares of Polycab India for ₹337 crore in an open market transaction. This move comes amid ongoing uncertainties and expectations of sustained volatility in Polycab’s stock performance.

Analysts anticipate a moderated growth pace for Polycab India’s core operations, citing factors such as higher interest rates, increased input costs, and intensified competitive pressures, despite a favorable demand environment.

The share price recovery suggests that investors may be reassessing the situation and market sentiment around Polycab India following the recent decline.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.