Jefferies Raises Polycab Target to Rs 10,920: 5 Reasons for Bullish Outlook

Polycab India shares saw a significant boost after international brokerage Jefferies raised its target price to Rs 10,920, maintaining a "Buy" rating despite the stock's recent 30% rally. The brokerage anticipates a 14% upside from current levels, driven by massive market share gains and emerging sector opportunities.

Dominating the Cables and Wires (C&W) Market

A primary driver for the bullish call is Polycab’s aggressive expansion in the organized sector. Jefferies noted that the company’s organized market share in the C&W industry is projected to rise to 30-31% in FY26, a massive jump from approximately 18% in FY20. In FY26, the C&W segment accounted for nearly 87% of total revenue, delivering 33% year-on-year growth. This was fueled by an 18% increase in volume and 16% price-led growth. Furthermore, the launch of the 'Etira' brand has successfully allowed Polycab to capture market share from unorganized players in Tier 2 to Tier 5 markets.

Capitalizing on the Data Centre Boom

The surge in digital infrastructure presents a high-margin opportunity for Polycab. Data centres require significantly higher cable intensity compared to other sectors; cables account for an estimated 8-10% of total data centre capex, whereas they represent only about 3% in general industrial projects. Jefferies highlighted Polycab's active involvement in data centre projects for Vodafone Idea through Vertiv, positioning the company to ride the wave of rising digital infrastructure investments.

A Robust and Diversified Order Pipeline

Polycab maintains a healthy order book, standing at Rs 11,300 crore as of March 2026. A significant portion of this pipeline is tied to 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). Additionally, looking toward the long term, the company’s new extra-high voltage (EHV) cable plant is expected to be commissioned by the end of CY26, with revenue contributions starting from FY28.

Mix de revenus stratégique et faible risque de concentration

La stabilité financière de l'entreprise est renforcée par des flux de revenus hautement diversifiés. Les segments B2B, incluant le pétrole et le gaz, l'énergie et les centres de données, contribuent à environ 35 % des ventes, tandis que les projets pilotés par le gouvernement représentent 30 %. La demande résidentielle B2C ajoute 20 à 25 % supplémentaires, et l'activité FMEG contribue à environ 10 %. Crucialement, Polycab fait face à un faible risque de concentration de la clientèle ; ses 10 principaux clients ne représentent que 21 % des ventes totales, le plus gros client individuel ne comptant que pour 4 %.

Forte trajectoire des bénéfices

Jefferies a augmenté son multiple de valorisation cible à 41x les bénéfices, soit une prime de 10 % par rapport à la moyenne historique sur cinq ans de 37x. Cette confiance découle de perspectives de bénéfices impressionnantes, le courtier prévoyant un CAGR du BPA de 22 % entre FY26 et FY29. Cette croissance devrait être portée par une croissance constante des volumes dans l'activité principale C&W et par l'amélioration des marges au sein du segment FMEG.

Points clés à retenir