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.

Fluxos de Receita Diversificados e Baixa Concentração de Risco

A resiliência da Polycab é sustentada por um mix de receitas bem equilibrado que mitiga riscos específicos de cada setor. O detalhamento da receita inclui:

Crucialmente, a empresa mantém uma baixa concentração de clientes; os 10 principais clientes contribuem com apenas cerca de 21% das vendas totais, sendo que o maior cliente individual representa apenas 4%.

Perspectivas de Lucros Fortes

A Jefferies aumentou seu múltiplo de avaliação alvo para 41x o lucro, representando um prêmio de 10% em relação à sua média histórica de cinco anos. Esse otimismo baseia-se na expectativa de um CAGR de EPS de 22% entre o AF26 e o AF29, impulsionado pelo crescimento do volume principal e melhorias nas margens no segmento de Bens Elétricos de Consumo Rápido (FMEG).

Principais Conclusões