Shares of Polycab India fell over 5 percent in intraday trades on Friday after the Income Tax Department's investigation wing conducted searches at nearly 50 locations associated with the company across the country.

Homes and offices of top management associated with the cable and wire manufacturer were also reportedly searched. The specific reasons for the searches by the Income Tax Department and the nature of the investigation are still unclear at this point. The Bombay Stock Exchange has also asked the company for clarification on these raids.

The share fell by up to 5.2 percent to its daily low ₹5,326.

Despite this setback, the stock recorded remarkable growth: it rose 109 percent last year and 113 percent in 2023. Over a three-year period, shares of this wire and cable manufacturer delivered significant returns, registering growth of 449 percent percent.

It reached its record high of ₹5,733 earlier this month on December 12, rising from its 52-week low of over 129 percent ₹2,500.25, hit on December 26, 2022.

The cable and wire maker reported a 59 percent rise in profits in the September quarter ₹426 crore. The profit for the September 2022 quarter was ₹268 crore. Sales have now increased by 26.5 percent ₹4,218 crore in the second quarter against ₹3,332 crore in September quarter 2022. Polycab's EBITDA grew 43 per cent year-on-year in Q2FY24 ₹608.9 crore and the EBITDA margin improved by 160 basis points year-on-year to 14.4 per cent. The company cited a favorable product mix and better operating leverage as reasons for the margin increase.

Polycab produces and sells cables and wires (C&W) as well as products for fast-moving electrical devices (FMEG). It also undertakes limited engineering, procurement and construction projects. The company has 25 manufacturing facilities in Gujarat, Maharashtra, Uttarakhand, Tamil Nadu and Daman.