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 di ricavi strategico e basso rischio di concentrazione

La stabilità finanziaria dell'azienda è sostenuta da un flusso di ricavi altamente diversificato. I segmenti B2B, inclusi oil & gas, energia e data center, contribuiscono per circa il 35% alle vendite, mentre i progetti guidati dal governo rappresentano il 30%. La domanda residenziale B2C aggiunge un ulteriore 20-25%, e il business FMEG contribuisce per circa il 10%. Fondamentalmente, Polycab presenta un basso rischio di concentrazione dei clienti; i suoi primi 10 clienti contribuiscono solo per il 21% delle vendite totali, con il singolo cliente più grande che rappresenta solo il 4%.

Forte traiettoria degli utili

Jefferies ha aumentato il suo multiplo di valutazione target a 41x gli utili, un premio del 10% rispetto alla media storica quinquennale di 37x. Questa fiducia deriva da prospettive sugli utili impressionanti, con la società di brokeraggio che prevede un CAGR dell'EPS del 22% tra il FY26 e il FY29. Si prevede che questa crescita sarà trainata da una costante crescita dei volumi nel core business C&W e dal miglioramento dei margini nel segmento FMEG.

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