If losses hold, the stock is set for its worst day since March 2020. — Bloomberg
BENGALURU: Polycab India plunged 23% to a six-month low yesterday after a tax department search at the wire and cable maker found unaccounted sales worth 10 billion rupees.
If losses hold, the stock is set for its worst day since March 2020, when coronavirus fears had gripped markets.
India’s income tax department said on Wednesday it found the unaccounted sales during a search at a wire and cable maker in December. While the department did not name the company, a government source said it was referring to Polycab.
“Preliminary analysis suggests that the flagship company indulged in unaccounted cash sales, cash payments for unaccounted purchases, non-genuine transport and sub-contracting expenses for suppression of its taxable income,” the department said in a statement.
Polycab did not respond to Reuters’ request for comment on the income tax department’s allegations.
The stock, recommended by 15 analysts as a “buy” or “strong buy” according to LSEG data, fell 10% to a lower limit at yesterday’s open and was last trading down 18.6% at 3,997 rupees.
It was held at exchange-imposed lower limits thrice, with trading volumes at the highest since its 2019 listing after just over an hour into the session.
Polycab earlier this week denied rumours of tax evasion. The stock had plunged 9% on Tuesday, but closed slightly higher in the following session after the denial.
The company reported revenue of 42.18 billion rupees in the September quarter, up 27% over the previous year and almost double its first reported revenue in the quarter ended March 31, 2019, following its listing.
The stock soared nearly 1,000% to a record high of 5,733 rupees in December, compared to its initial public offering price of 538 rupees. — Reuters
