Polycab's Rs 3,002-crore BharatNet deal with BSNL lifts stock in early deals 

Shares of Polycab India Ltd rose nearly 2% on Thursday after the company said it has executed an agreement with BSNL for Bharat Net in the Bihar Telecom Circle for Rs 3,002.99 crore. Polycab India stock gained 1.89% to Rs 5105.75 on Thursday against the previous close of Rs 5010.60. Total 5838 shares of Polycab India changed hands amounting to a turnover of Rs 2.94 crore on BSE. Market cap of the firm stood at Rs 75,758 crore in the current session.

The company will act as the project implementation agency for design, supply, construction, installation, upgradation, operation and maintenance of middle mile network of Bharat Net.

The work will involve three years of construction and 10 years of maintenance. Of this, it will be 5.5% per annum of the capex for the first five years and 6.5% per annum of capex for the next five years.

The contract includes Rs 1,549.66 crore capex, Rs 929.79 crore opex and Rs 523.53 crore opex for existing network, totalling to Rs 3002.99 crore, said Polycab.

Recently, brokerage firm Morgan Stanley assigned the stock an 'overweight' rating with a target price of Rs 7,395 per share.

Morgan Stanley said there is a strong demand uptick in the cables and wires space in the fourth quarter so far, and the company's exports are shaping up well.

Net profit for the December 2024 quarter rose 10% to Rs 458 crore against Rs 412.85 crore in the corresponding quarter of the previous fiscal.

The management said that it would be surpass its financial year 2026 revenue growth guidance of Rs 20,000 crore in the current financial year itself.

Revenue in the last quarter rose 20.4% from last year to Rs 5,226 crore. Operating EBITDA climbed 26% year-over-year to Rs 720 crore. The EBITDA margin stood at 13.8 percent in Q3.

However, total expenses rose sharply by 20 percent from the year-ago period to Rs 4,634 crore.

Polycab India Limited is the country's largest manufacturer of wires and cables. The company's business operations span across India through 23 manufacturing facilities, 15 plus offices and 25 plus warehouses.