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.

Campuran Hasil Strategik dan Risiko Penumpuan Rendah

Kestabilan kewangan syarikat diperkukuh oleh aliran hasil yang sangat pelbagai. Segmen B2B, termasuk minyak & gas, kuasa, dan pusat data, menyumbang kira-kira 35% daripada jualan, manakala projek diterajui kerajaan merangkumi 30%. Permintaan perumahan B2C menambah 20-25% lagi, dan perniagaan FMEG menyumbang kira-kira 10%. Paling penting, Polycab menghadapi risiko penumpuan pelanggan yang rendah; 10 pelanggan teratasnya hanya menyumbang 21% daripada jumlah jualan, dengan pelanggan tunggal terbesar hanya merangkumi 4%.

Trajektori Pendapatan yang Kukuh

Jefferies telah meningkatkan gandaan penilaian sasarannya kepada 41x pendapatan, iaitu premium 10% berbanding purata sejarah lima tahun sebanyak 37x. Keyakinan ini berpunca daripada prospek pendapatan yang mengagumkan, dengan syarikat broker meramalkan EPS CAGR sebanyak 22% antara FY26 dan FY29. Pertumbuhan ini dijangka didorong oleh pertumbuhan volum yang stabil dalam perniagaan teras C&W dan peningkatan margin dalam segmen FMEG.

Ringkasan Utama