Jefferies Raises Polycab Target Price to Rs 10,920: 5 Growth Drivers
Polycab India shares saw a significant uptick of 4% following a bullish update from international brokerage Jefferies. Despite a substantial 30% rally in the stock during 2026, Jefferies has reiterated a "Buy" rating with a revised target price of Rs 10,920, signaling a potential 14% upside from current levels.
Dominating the Cables and Wires (C&W) Market
A primary driver for the positive outlook is Polycab's aggressive expansion in the organized sector. The company has successfully increased its organized market share in the C&W industry to 30–31% for FY26, a massive jump from approximately 18% in FY20. In FY26, the C&W segment accounted for nearly 87% of total revenue, delivering a 33% year-on-year growth. This growth was fueled by an 18% increase in volume and 16% price-led growth, partly due to rising copper prices. Additionally, the launch of the 'Etira' brand has allowed Polycab to effectively capture market share from unorganized players in tier 2 to tier 5 markets.
The Data Centre and Digital Infrastructure Boom
Jefferies highlighted the emerging opportunity within the data centre segment. Data centres require high cable intensity, with cables accounting for an estimated 8–10% of total project capex. Polycab is already establishing its footprint here, notably participating in data centre projects for Vodafone Idea through Vertiv. As digital infrastructure investments scale up across India, Polycab is strategically positioned to capture this high-value demand.
Robust Order Book and Infrastructure Projects
The company maintains a healthy order book, standing at Rs 11,300 crore as of March 2026. A significant portion of this is driven by government-led initiatives such as RDSS and BharatNet. The BharatNet project alone offers an estimated revenue potential of approximately Rs 8,000 crore (excluding GST). Furthermore, looking toward the medium term, Polycab's new extra-high voltage (EHV) cable plant is expected to be commissioned by the end of CY26, with revenue contributions slated to begin from FY28.
Flujos de ingresos diversificados y baja concentración de riesgos
La resiliencia de Polycab está respaldada por una combinación de ingresos bien equilibrada que mitiga los riesgos específicos del sector. El desglose de los ingresos incluye:
- Segmentos B2B: 35% (Energía, Petróleo y Gas, proyectos vinculados a PLI y Centros de Datos).
- Proyectos gubernamentales: 30% (RDSS e iniciativas de movilidad).
- Demanda de vivienda B2C: 20–25%.
- FMEG y exportaciones: 10% y 6%, respectivamente.
Fundamentalmente, la empresa mantiene una baja concentración de clientes; los 10 principales clientes aportan solo alrededor del 21% de las ventas totales, y el cliente individual más grande representa solo el 4%.
Perspectivas sólidas de ganancias
Jefferies ha aumentado su múltiplo de valoración objetivo a 41x ganancias, lo que representa una prima del 10% sobre su promedio histórico de cinco años. Este optimismo se fundamenta en la expectativa de un CAGR de EPS del 22% entre el FY26 y el FY29, impulsado por el crecimiento del volumen principal y las mejoras en los márgenes en el segmento de Bienes Eléctricos de Consumo Masivo (FMEG).
Conclusiones clave
- Liderazgo de mercado: Polycab casi ha duplicado su cuota de mercado organizado en el segmento C&W desde el FY20 hasta el FY26.
- Crecimiento estratégico: Sectores emergentes como los centros de datos y proyectos gubernamentales a gran escala como BharatNet son importantes catalizadores de ingresos.
- Impulso financiero: Los analistas proyectan un sólido CAGR de EPS del 22% hasta el FY29, respaldado por una base de clientes diversificada y de baja concentración.