Polycab is the top loser on the BSE since the opening bell today morning. Opening 190% lower at Rs.4421.85, the stock slipped down to Rs.3812.35, down over 22%. It remains in the red but is trading at Rs.3975 levels.
The stock price has been on a roller coaster this week after reports emerged on Tuesday about Income Tax (IT) raids on the company and then reports surfaced about the company being accused of tax evasion to the tune of Rs.200 crore in undisclosed income.
The company issued a clarification yesterday, denying reports of tax evasion, saying, “the company asserts its commitment to compliance and transparency, having fully cooperated with the Income Tax Department officials during the search proceedings in December 2023. The company has not received any communication from the income-tax department regarding the outcome of the search."
There is also a report put out by the Press Information Bureau (PIB), without naming Polycab, stating that a company which makes wires, cables and other electrical items is undergoing search and seizure operations and among other things, said that preliminary analysis suggests that the flagship company indulged in unaccounted cash sales, cash payments for unaccounted purchases, non-genuine transport and sub-contracting expenses, etc for suppression of its taxable income."
Our Editor, Mr.SP Tulsian’s take on this development - Polycab has one leading Tax Expert on the Board of the company, who was also Auditor of RIL for last 5 years, and now Auditor of Tata Sons capable to take care of interests of the company and its shareholders. Hence, stick to fundamentals, while weakness in the stock is giving a GOD sent opportunity, to buy this stock. Promoters of the company, holding 66% stake of M cap of Rs. 74k cr company, will not allow the damage to get caused by petty tax evasion of rumour being spread.