Polycab Shares Locked In 20% Lower Circuit After Tax Raids
The tax department detected unaccounted cash sales of Rs 1,000 crore and Rs 400 crore cash payments made by a distributor on behalf of the flagship company.
Shares of Polycab India Ltd. were locked in 20% lower circuit on Thursday after the income tax department initiated search and seizure operations against the company.
The tax department detected unaccounted cash sales of Rs 1,000 crore and Rs 400 crore cash payments made by a distributor on behalf of the flagship company. The company was indulged in unaccounted cash sales, cash payments for unaccounted purchases, non-genuine transport and sub-contracting expenses for suppression of its taxable income, according to a statement released by the finance ministry.
The tax department has identified non-genuine expenses that total to Rs 100 crore. Besides, it alledged the company inflated the purchase account through authorised distributors aggregating to Rs 500 crore.
Polycab refused rumours of tax evasion. The company in an exchange filing on Wednesday said that it had not received any communication from the income tax department regarding the outcome of the search.
The scrip was locked in the lower circuit of 20% at Rs 3,929.50 apiece, the lowest level since Jul. 18, 2023. This compares to a 0.27% advance in the NSE Nifty 50 Index as of 9:57 a.m.
It has risen 47.11% in the last 12 months. Total traded volume so far in the day stood at 2.9 times its 30-day average. The relative strength index was at 18 indicating it was underbought.
Out of 31 analysts tracking the company, 19 maintain a 'buy' rating, 6 recommend a 'hold,' and 6 suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 57.2%.
