Jefferies Hikes Polycab Target Price to Rs 10,920 Amid Strong Growth Outlook

Polycab India shares witnessed a significant uptick of 4% following a bullish report from international brokerage firm Jefferies. Despite a 30% rally in the stock throughout 2026, Jefferies has reiterated its "Buy" rating with a revised target price of Rs 10,920, forecasting a potential 14% upside from current levels.

Dominating the Organized Cable & Wires Market

A primary driver behind the optimistic outlook is Polycab's aggressive expansion in the Cables and Wires (C&W) segment. The company has successfully transitioned from an 18% organized market share in FY20 to a commanding 30-31% in FY26. This dominance is reflected in the C&W segment's contribution to FY26 revenue, which stood at nearly 87%, delivering a robust 33% year-on-year growth.

This growth was fueled by a combination of 18% volume expansion and 16% price-led growth, aided by higher copper prices. Furthermore, the launch of the 'Etira' brand has been instrumental in capturing market share from unorganized players in Tier 2 to Tier 5 markets.

Capitalizing on the Data Centre and Digital Boom

Jefferies highlighted that the burgeoning data centre industry presents a high-margin growth opportunity. Data centres require significantly higher cable intensity, with cables accounting for an estimated 8-10% of total project capex—nearly triple the requirement for standard industrial projects. Polycab is already well-positioned in this space, actively participating in data centre projects for Vodafone Idea through Vertiv, making it a key beneficiary of India's digital infrastructure expansion.

A Robust Order Pipeline and Strategic Infrastructure Projects

The company maintains a healthy order book, which stood at Rs 11,300 crore as of March 2026. A major catalyst is the BharatNet project, which offers an estimated revenue potential of approximately Rs 8,000 crore (excluding GST). Polycab has been executing these orders since the December 2025 quarter. Additionally, the upcoming commissioning of a new extra-high voltage (EHV) cable plant by the end of CY26 is expected to drive significant revenue contributions starting from FY28.

Diversified Revenue Streams and Financial Resilience

Het bedrijfsmodel van Polycab is gebaseerd op een lage klantconcentratie, waarbij de top 10 klanten slechts 21% van de totale omzet vertegenwoordigen. De omzetmix is sterk gediversifieerd:

Deze diversificatie, gecombineerd met een consistente tweevoudige groei in de C&W-business en stabiele EBIT-marges tussen de 12-15%, ondersteunt de verwachting van Jefferies van een EPS CAGR van 22% tussen FY26 en FY29.

Belangrijkste conclusies