Polycab share price plunges 20% amid allegations of ‘unaccounted sales’ by Income Tax Department – Times of India

Polycab shares today: The shares of electrical equipment manufacturer Polycab witnessed a dip of 20%, with the stock price dropping to a daily low of Rs 3930.55 on Thursday. This decline followed revelations by the Income Tax department, which uncovered unaccounted sales amounting to Rs 1,000 crore during recent raids on the Polycab group.
“Unaccounted cash of more than Rs 4 crore was seized and more than 25 bank lockers were put on restraint after the searches were launched against the group on December 22 last year,” ET quoted the Central Board of Direct Taxes as saying.The operations covered 50 premises across various locations, including Mumbai, Pune, Aurangabad, Nashik in Maharashtra, Daman, Halol in Gujarat, and Delhi.
The CBDT has also disclosed that substantial evidence, both in the form of documents and digital data, was seized during the raids, revealing the group’s “modus operandi of tax evasion” in collaboration with certain authorised distributors.According to CBDT claims, credible evidence recovered during the search indicated that the flagship company engaged in unaccounted cash sales of approximately Rs 1,000 crore, which were not recorded in the books of accounts.
Responding to these allegations, Polycab India issued a clarification to stock exchanges, dismissing reports of tax evasion as mere “rumours.” “Polycab India denies any rumours of tax evasion by the Company circulating in the media,” the company filing said, adding that “The company asserts its commitment to compliance and transparency, having fully cooperated with the Income Tax Department officials during the search proceedings in Dec 2023. The company has not received any communication from the Income-tax department regarding the outcome of the search,” the company reportedly said.

Despite the company’s denial, its stock experienced an 18% loss in four sessions, with the correction bringing the stock price below its 50-day simple moving average (SMA), although it still trades above its 200-day SMA, as reported by Trendlyne.
The stock is currently deemed oversold, with an MFI of 27.4, while its RSI hovers near 45. In technical analysis, a number below 30 indicates an oversold condition, while above 70 is considered overbought. The market wide position limit (MWPL) stands at 73%, with open interest reported by Trendlyne at 2.4 million, reflecting a 1.4% increase.
Polycab India, initially established as Sind Electric Stores in 1964, underwent name changes over the years, ultimately adopting its current name in 2018.