Jefferies Raises Polycab Target Price to Rs 10,920: 5 Key Growth Drivers

Polycab India shares surged up to 4% following a bullish update from international brokerage Jefferies, which raised its target price to Rs 10,920. Despite a significant 30% rally in the stock during 2026, Jefferies has reiterated a 'Buy' rating, forecasting a further 14% upside driven by massive infrastructure shifts and market share dominance.

Dominating the Organised Cables & Wires Market

A primary driver behind the bullish outlook is Polycab’s aggressive expansion in the Cables & Wires (C&W) segment. The company has successfully captured significant market share from unorganised players, with its organised market share rising to 30-31% in FY26, up from just 18% in FY20.

The C&W segment remains the company's powerhouse, accounting for nearly 87% of FY26 revenue and delivering 33% year-on-year growth. This growth was fueled by an 18% increase in volume and 16% price-led growth. Notably, the launch of the 'Etira' brand has been instrumental in penetrating tier 2 to tier 5 markets.

Tapping into the Data Centre and Digital Boom

Jefferies identified data centres as a high-margin emerging growth engine. Data centres require significantly higher cable intensity compared to traditional industrial projects; cables account for an estimated 8-10% of total data centre capex, whereas they represent only about 3% in general industrial projects. Polycab is already leveraging this trend, participating in data centre projects for Vodafone Idea through Vertiv, positioning itself at the heart of India's digital infrastructure expansion.

A Massive Order Pipeline and Infrastructure Projects

The company maintains a robust operational cushion with an open order book valued at Rs 11,300 crore as of March 2026. A significant portion of this is linked to government-led initiatives such as BharatNet and RDSS.

The BharatNet project alone offers an estimated revenue potential of approximately Rs 8,000 crore (excluding GST). Furthermore, Polycab is scaling its manufacturing capabilities with a new extra-high voltage (EHV) cable plant, which is expected to be commissioned by the end of CY26, contributing to revenue from FY28 onwards.

Flujos de ingresos diversificados y bajo riesgo de concentración

El modelo de negocio de Polycab se basa en la resiliencia a través de la diversificación. Su combinación de ingresos está bien distribuida en varios sectores:

Fundamentalmente, la empresa enfrenta un bajo riesgo de concentración de clientes, ya que sus 10 principales clientes contribuyen con solo el 21% de las ventas totales, lo que garantiza que ningún cliente individual pueda desestabilizar sus ganancias.

Perspectivas financieras y valoración

Reflejando su desempeño constante —incluyendo el mantenimiento de los márgenes EBIT en el rango del 12-15% durante los últimos 15 trimestres— Jefferies ha aumentado el múltiplo de valoración objetivo de Polycab a 41x las ganancias. La correduría espera una sólida tasa de crecimiento anual compuesta (CAGR) de las ganancias por acción (EPS) del 22% entre el FY26 y el FY29, respaldada por un crecimiento sostenido del volumen y mejoras en los márgenes en el segmento de productos eléctricos de consumo masivo (FMEG).

Conclusiones clave