Jefferies Raises Polycab Target Price to Rs 10,920 Amid Growth Surge
Polycab India shares surged up to 4% on Wednesday following a bullish update from international brokerage Jefferies, which reiterated its 'Buy' rating. Despite a significant 30% rally in 2026, the brokerage has raised its target price to Rs 10,920, forecasting a further upside of 14% from current market levels.
Dominating the Organized Cables and Wires Market
A primary driver for Jefferies' optimistic outlook is Polycab's aggressive expansion in the Cables and Wires (C&W) segment. The company has demonstrated remarkable market share gains, with its organized market share climbing to 30-31% in FY26, up from approximately 18% in FY20.
The C&W segment remains the backbone of the company, accounting for nearly 87% of FY26 revenue and delivering 33% year-on-year growth. This growth was fueled by an 18% increase in volumes and 16% price-led growth. Notably, the launch of the 'Etira' brand in tier 2 to tier 5 markets has allowed Polycab to effectively capture market share from unorganized players.
Capitalizing on the Data Centre and Digital Boom
Jefferies identified data centres as a massive emerging growth lever. 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 standard industrial projects. Polycab is already strategically positioned in this space, participating in data centre projects for Vodafone Idea through Vertiv, making it a key beneficiary of India's digital infrastructure expansion.
A Robust Order Book and Infrastructure Tailwinds
Polycab maintains a formidable order book, standing at Rs 11,300 crore as of March 2026. A significant portion of this pipeline 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).
Looking ahead, the company is expanding its manufacturing capabilities with a new extra-high voltage (EHV) cable plant, which is expected to be commissioned by the end of CY26, with revenue contributions starting from FY28.
Diversified Revenue Streams and Financial Strength
Ketahanan perusahaan didukung oleh bauran pendapatan yang sangat terdiversifikasi yang memitigasi risiko konsentrasi:
- Segmen B2B: Sektor ketenagalistrikan, minyak & gas, serta pusat data menyumbang sekitar 35% dari penjualan.
- Proyek Pemerintah: Inisiatif ketenagalistrikan dan mobilitas menyumbang sekitar 30%.
- B2C/Perumahan: Permintaan dari sektor perumahan menyumbang 20-25%.
- FMEG & Ekspor: Fast-Moving Electrical Goods menyumbang 10%, sementara ekspor menyumbang 6%.
Yang terpenting, Polycab menjaga konsentrasi pelanggan yang rendah, dengan 10 pelanggan teratas hanya menyumbang 21% dari total penjualan.
Proyeksi Laba Masa Depan
Jefferies memperkirakan Polycab akan memberikan CAGR Laba Per Saham (EPS) yang mengesankan sebesar 22% antara FY26 dan FY29. Pertumbuhan ini diharapkan didorong oleh pertumbuhan volume yang berkelanjutan dalam bisnis inti C&W dan peningkatan margin dalam segmen FMEG. Meskipun terdapat risiko seperti volatilitas harga tembaga dan perlambatan permintaan perumahan, perusahaan pialang tersebut telah menaikkan target kelipatan valuasinya menjadi 41x laba.
Poin-Poin Penting
- Kepemimpinan Pasar: Polycab telah hampir menggandakan pangsa pasar terorganisirnya di segmen C&W dari 18% pada FY20 menjadi lebih dari 30% pada FY26.
- Sektor Pertumbuhan Tinggi: Perusahaan berada dalam posisi untuk mendapatkan manfaat dari lonjakan pusat data dan proyek infrastruktur pemerintah yang masif seperti BharatNet.
- Proyeksi Keuangan yang Kuat: Analis memproyeksikan CAGR EPS sebesar 22% hingga FY29, didukung oleh model pendapatan yang terdiversifikasi dan buku pesanan yang kuat sebesar Rs 11.300 crore.