'No communication from I-T dept': Polycab India junks tax evasion rumours; shares up

Polycab India Ltd (PIL), the wires and cables manufacturing company, has denied the allegations of tax evasion worth ₹250-300 crore. Amid the development, the company's shares recovered from yesterday's fall and surged as much as 3.4% to ₹4,907 on the BSE today. At this share price, the electrical goods company's market cap stands at ₹73,941.99 crore.

In a latest statement issued in a BSE filing, Polycab India affirmed its commitment to delivering high-quality products and services to customers, emphasising adherence to corporate governance principles and ethical business practices.

“The Company asserts its commitment to compliance and transparency, having fully cooperated with the Income Tax Department officials during the search proceedings in Dec ’23. The Company has not received any communication from the Income-tax department regarding the outcome of the search,” the company states.

It says it collaborated with the officials from the IT department throughout the process, providing the necessary clarifications and details as requested.

“Polycab India remains focused on its mission to provide quality products and services to its customers while upholding the principles of corporate governance and ethical business practices,” it adds.

Notably, reports suggest in December 2023, the income tax (I-T) department conducted search operations at certain facilities and plants associated with the company starting from December 22, 2023, till December 30, 2023. The I-T department allegedly identified transactions amounting to ₹250-300 crore in the accounts of the company's promoters.

On October 18, 2023, Polycab India said its revenue for the July-September quarter of the financial year 2023-24 rose to ₹4,218 crore vs from ₹3,332 crore in the year-ago period. Polycab India posted a 58.8% increase in its second-quarter profit, supported by robust sales in its wires and cables business. The consolidated net profit surged to ₹426 crore in the three months ending on September 30, compared to ₹268 crore reported in the corresponding period a year earlier.

Polycab, touted to be the second-largest cable maker in India by market capitalisation, said it reported robust double-digit earnings increments over the past four quarters. The company's EBITDA also surged from ₹427.6 crore a year ago to ₹608.7 crore in Q2 FY24.

PIL’s business operations span across India through 25 manufacturing facilities, 14 offices and 23 warehouses. PIL has also served customers in 76 countries globally.

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