Jefferies Hikes Polycab Target Price to Rs 10,920 Amid Strong Growth Outlook
Polycab India shares witnessed a significant uptick of 4% following a bullish report from international brokerage firm Jefferies. Despite a 30% rally in the stock throughout 2026, Jefferies has reiterated its "Buy" rating with a revised target price of Rs 10,920, forecasting a potential 14% upside from current levels.
Dominating the Organized Cable & Wires Market
A primary driver behind the optimistic outlook is Polycab's aggressive expansion in the Cables and Wires (C&W) segment. The company has successfully transitioned from an 18% organized market share in FY20 to a commanding 30-31% in FY26. This dominance is reflected in the C&W segment's contribution to FY26 revenue, which stood at nearly 87%, delivering a robust 33% year-on-year growth.
This growth was fueled by a combination of 18% volume expansion and 16% price-led growth, aided by higher copper prices. Furthermore, the launch of the 'Etira' brand has been instrumental in capturing market share from unorganized players in Tier 2 to Tier 5 markets.
Capitalizing on the Data Centre and Digital Boom
Jefferies highlighted that the burgeoning data centre industry presents a high-margin growth opportunity. Data centres require significantly higher cable intensity, with cables accounting for an estimated 8-10% of total project capex—nearly triple the requirement for standard industrial projects. Polycab is already well-positioned in this space, actively participating in data centre projects for Vodafone Idea through Vertiv, making it a key beneficiary of India's digital infrastructure expansion.
A Robust Order Pipeline and Strategic Infrastructure Projects
The company maintains a healthy order book, which stood at Rs 11,300 crore as of March 2026. A major catalyst is the BharatNet project, which offers an estimated revenue potential of approximately Rs 8,000 crore (excluding GST). Polycab has been executing these orders since the December 2025 quarter. Additionally, the upcoming commissioning of a new extra-high voltage (EHV) cable plant by the end of CY26 is expected to drive significant revenue contributions starting from FY28.
Diversified Revenue Streams and Financial Resilience
El modelo de negocio de Polycab se basa en una baja concentración de clientes, con los 10 principales clientes aportando solo el 21% de las ventas totales. La mezcla de ingresos está altamente diversificada:
- Segmentos B2B: 35% (Energía, Petróleo y Gas, Centros de Datos y proyectos vinculados a PLI)
- Proyectos liderados por el gobierno: 30% (RDSS, Movilidad y Energía)
- Demanda de vivienda B2C: 20-25%
- FMEG y Exportaciones: 16% en conjunto
Esta diversificación, junto con un crecimiento constante de doble dígito en el negocio de C&W y márgenes EBIT estables de entre el 12% y el 15%, respalda la expectativa de Jefferies de un CAGR del EPS del 22% entre el FY26 y el FY29.
Conclusiones clave
- Liderazgo en el mercado: Polycab ha ascendido hasta alcanzar una cuota de mercado organizada del 30-31% en el segmento de C&W, superando significativamente a los competidores no organizados.
- Nuevos motores de crecimiento: La empresa está pivotando estratégicamente hacia áreas de alto crecimiento como los centros de datos y proyectos de infraestructura gubernamental a gran escala como BharatNet.
- Sólida trayectoria financiera: Los analistas esperan un CAGR del EPS del 22% hasta el FY29, respaldado por una mezcla de ingresos diversificada y una sólida cartera de pedidos de Rs 11,300 crore.