When we talk about the electric cable sector in our country, the stock which comes to our mind as the undisputed leader in this sector is a stock called Polycab India Ltd.
Currently the stock is trading at Rs 2112. Before initiating a bullish trade in this stock, let’s try to understand the technical as well as fundamental analysis of this stock.
Technical analysis-If you see carefully the stock has remained sideways since a good long time. It has been in a range of Rs 2000 to Rs 2800 since last 1 year. So basically, the stock gives an opportunity to smart investors to enter at lower levels and exit at higher levels later. There is one more peculiar thing about this stock which is seen over the last few years-it is that whenever the stock becomes sideways and starts an uptrend a fresh lifetime high is created. As of now the stock is poised around a very good support zone of 2100-2200. So technically the stock is at a good setup as of now.
Fundamental analysis-The stock is the undisputed market leader with a market capitalization of more than Rs 31,620 crores. The sales of this company have been consistent since the last many quarters (2000 crores and plus). The OPM of the stock has been maintained well in the range of 12- 14%. The stock had a debt of more than 850 crores in the year 2017 but since then the debt has gradually come down and recently after the announcement of March 2022 results, the debt figure has come down to just 118 crores. So, this gives us a signal that the stock is on the path to become debt free very soon.68% of the shareholding of this company is with promoters which has stayed the same since last many years. This gives us an indication that the promoters are not willing to dilute their holding. FIIs, DIIs and other big players hold 15% of the shares of the company. Only 17% is held with the retailers giving us a signal that the stock is in the safe hands of big people. So based on this analysis I would like to initiate a positional bullish trade in this stock with a target of Rs 2800 and above in the coming few months.