Recommendation From Cables-Power & Cement Sectors

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

POLYCAB INDIA LIMITED

CMP - Rs928.85
BSE CODE - 542652
Volume - 14,435
Face Value - Rs 10
Target- Rs 990
Stoploss - Rs 885 (CLS)

Polycab India Limited has been a dominant player in India’s cable and wire market. The company has been developing a product portfolio to cater to the fast-growing demand for fast-moving electrical goods. Looking the quarterly trends on a consolidated basis for Q2FY21, the net sales fell by 5.72 per cent to Rs2,113.68 crore from Rs2,241.94 crore reported in Q2FY20. PBDT came in at Rs333.84 crore, expanding by 22.99 per cent compared to Rs271.44 crore posted in Q2FY21. The company gained net profit of Rs221.81 crore in Q2FY21, an increase by 13.51 per cent from the net profit of Rs195.41 crore gained in Q2FY20. It witnessed healthy revival in its domestic B2C segment and exports during Q2FY21. This led to stronger recovery in profits. The company is also focusing on launching new products in the FMEG segment to boost growth. The outlook for Polycab India remains positive as its performance continues to remain sturdy in spite the industry facing challenges. Hence, BUY.

PRISM JOHNSON LTD.

CMP - Rs75.40
BSE CODE - 500338 
Volume - 1,08,475
Face Value - Rs 10
Target - Rs 82
Stoploss - Rs70(CLS)

Prism Johnson Limited is a building material company with a wide range of products from cement, readymixed concrete, tiles and bath products. The company has three divisions, namely, cement, H & R Johnson and RMC India. For Q2FY21 on a consolidated basis, the company reported net sales of Rs1,326.28 crore, decreasing by 5.17 per cent from Rs1,398.54 crore reported for Q2FY20. Its PBDT expanded by 286.04 per cent to Rs109.21 crore in Q2FY21 as compared to Rs28.29 crore posted in Q2FY20. Prism Johnson gained net profit of Rs25.90 crore in Q2FY21 as against the net loss of Rs30.87 crore incurred in Q1FY20. As economic activities are coming back to normal, demand for the company’s products has reached the pre-pandemic level. The company has improved its product mix and expanded the distribution network. The company is efficiently managing working capital, improving contribution margin and reducing fixed costs. Hence, BUY.

(Closing price as of Nov. 03, 2020)