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

Polycab India shares saw a significant uptick as international brokerage firm Jefferies reiterated its "Buy" rating and raised the target price to Rs 10,920. Despite a 30% rally in the stock during 2026, analysts remain bullish, forecasting a 14% upside from current market levels driven by structural growth and market leadership.

Dominating the Organized Cables & Wires Market

One of the primary reasons for the optimistic outlook is Polycab’s aggressive expansion in the organised sector. The company has successfully captured significant market share, rising from approximately 18% in FY20 to an estimated 30-31% in FY26. This dominance is reflected in the Cables & Wires (C&W) segment, which accounted for nearly 87% of FY26 revenue. This segment delivered a robust 33% year-on-year growth, fueled by 18% volume growth and 16% price-led growth. Additionally, the launch of the 'Etira' brand has allowed Polycab to penetrate tier 2-5 markets, effectively siphoning business from unorganised players.

Tapping into the Data Centre Boom

The digital infrastructure surge presents a massive tailwind for Polycab. Data centres require high cable intensity, with cables accounting for an estimated 8-10% of total data centre capital expenditure (capex). Jefferies highlighted Polycab's existing presence in this niche, noting its involvement in data centre projects for Vodafone Idea through Vertiv. This positioning allows the company to capitalize on the massive capital inflows directed toward India's digital landscape.

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 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, the company is looking toward long-term expansion with a new extra-high voltage (EHV) cable plant, which is expected to be commissioned by the end of CY26 and contribute to revenue starting in FY28.

Diversificação Estratégica de Receita

A resiliência da empresa é sustentada por um mix de receitas bem distribuído, reduzindo a dependência de qualquer setor individual. O detalhamento inclui:

Notavelmente, a concentração de clientes permanece baixa, com os 10 principais clientes contribuindo com apenas 21% das vendas totais, mitigando o risco de quedas específicas de clientes.

Forte Impulso nos Lucros

A Jefferies aumentou seu múltiplo de avaliação alvo para 41x o lucro, um prêmio de 10% sobre sua média histórica de cinco anos de 37x. Isso reflete a confiança na capacidade da Polycab de entregar um CAGR de Lucro por Ação (EPS) de 22% entre o AF26 e o AF29. Espera-se que esse crescimento seja impulsionado pela expansão de volume no negócio principal de C&W e por melhorias nas margens dentro do segmento de Bens Elétricos de Consumo Rápido (FMEG).

Principais Conclusões