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.

Gediversifieerde inkomstenstromen en lage risicoconcentratie

De veerkracht van Polycab wordt ondersteund door een goed gebalanceerde omzetmix die sectorspecifieke risico's vermindert. De omzetverdeling omvat:

Cruciaal is dat het bedrijf een lage klantconcentratie behoudt; de top 10 klanten dragen slechts ongeveer 21% bij aan de totale omzet, waarbij de grootste individuele klant verantwoordelijk is voor slechts 4%.

Sterke winstverwachting

Jefferies heeft de beoogde waarderingsmultiple verhoogd naar 41x de winst, wat een premie van 10% vertegenwoordigt ten opzichte van het historische vijfjaarsgemiddelde. Dit optimisme is gebaseerd op de verwachting van een EPS CAGR van 22% tussen FY26 en FY29, gedreven door groei in kernvolumes en margeverbeteringen in het Fast Moving Electrical Goods (FMEG)-segment.

Kernpunten