Jefferies Raises Polycab Target Price to Rs 10,920: 5 Key Growth Drivers

Polycab India shares surged up to 4% following a bullish update from international brokerage Jefferies, which raised its target price to Rs 10,920. Despite a significant 30% rally in the stock during 2026, Jefferies has reiterated a 'Buy' rating, forecasting a further 14% upside driven by massive infrastructure shifts and market share dominance.

Dominating the Organised Cables & Wires Market

A primary driver behind the bullish outlook is Polycab’s aggressive expansion in the Cables & Wires (C&W) segment. The company has successfully captured significant market share from unorganised players, with its organised market share rising to 30-31% in FY26, up from just 18% in FY20.

The C&W segment remains the company's powerhouse, accounting for nearly 87% of FY26 revenue and delivering 33% year-on-year growth. This growth was fueled by an 18% increase in volume and 16% price-led growth. Notably, the launch of the 'Etira' brand has been instrumental in penetrating tier 2 to tier 5 markets.

Tapping into the Data Centre and Digital Boom

Jefferies identified data centres as a high-margin emerging growth engine. Data centres require significantly higher cable intensity compared to traditional industrial projects; cables account for an estimated 8-10% of total data centre capex, whereas they represent only about 3% in general industrial projects. Polycab is already leveraging this trend, participating in data centre projects for Vodafone Idea through Vertiv, positioning itself at the heart of India's digital infrastructure expansion.

A Massive Order Pipeline and Infrastructure Projects

The company maintains a robust operational cushion with an open order book valued at Rs 11,300 crore as of March 2026. A significant portion of this is linked to government-led initiatives such as BharatNet and RDSS.

The BharatNet project alone offers an estimated revenue potential of approximately Rs 8,000 crore (excluding GST). Furthermore, Polycab is scaling its manufacturing capabilities with a new extra-high voltage (EHV) cable plant, which is expected to be commissioned by the end of CY26, contributing to revenue from FY28 onwards.

Gediversifieerde inkomstenstromen en laag concentratierisico

Het bedrijfsmodel van Polycab is gebouwd op veerkracht door diversificatie. De omzetmix is goed verdeeld over verschillende sectoren:

Cruciaal is dat het bedrijf te maken heeft met een laag concentratierisico bij klanten; de top 10 klanten dragen slechts 21% bij aan de totale omzet, wat ervoor zorgt dat geen enkele klant de winst kan destabiliseren.

Financiële vooruitzichten en waardering

Als reflectie van de consistente prestaties — waaronder het handhaven van EBIT-marges in de range van 12-15% over de afgelopen 15 kwartalen — heeft Jefferies de doelwaarderingsmultiple van Polycab verhoogd naar 41x de winst. De broker verwacht een sterke CAGR van de winst per aandeel (EPS) van 22% tussen FY26 en FY29, ondersteund door aanhoudende volumegroei en margeverbeteringen in het Fast Moving Electrical Goods (FMEG)-segment.

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