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.

Flussi di ricavo diversificati e bassa concentrazione del rischio

La resilienza di Polycab è sostenuta da un mix di ricavi ben bilanciato che attenua i rischi specifici del settore. La ripartizione dei ricavi include:

Fondamentalmente, l'azienda mantiene una bassa concentrazione dei clienti; i primi 10 clienti contribuiscono solo per circa il 21% delle vendite totali, con il singolo cliente più grande che rappresenta solo il 4%.

Prospettive di utili solide

Jefferies ha aumentato il suo multiplo di valutazione target a 41x gli utili, rappresentando un premio del 10% rispetto alla sua media storica quinquennale. Questo ottimismo si basa sull'aspettativa di un CAGR dell'EPS del 22% tra l'FY26 e l'FY29, trainato dalla crescita dei volumi core e dal miglioramento dei margini nel segmento Fast Moving Electrical Goods (FMEG).

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