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.

Mitindo ya Mapato Iliyotawanywa na Hatari Ndogo ya Mkolezo

Mtindo wa biashara wa Polycab umejengwa juu ya ustahimilivu kupitia utawanyaji. Mchanganyiko wake wa mapato umegawanywa vizuri katika sekta kadhaa:

• Sekta za B2B (35%): Ikiwemo nishati, mafuta na gesi, na vituo vya data (data centres).
• Miradi ya Serikali (30%): Ikiwemo RDSS na mipango ya usafirishaji (mobility initiatives).
• Mahitaji ya Nyumba ya B2C (20-25%): Ikichangamkia ukuaji wa makazi.
• FMEG na Mauzo ya Nje (16%): Ikitoa kinga ya ziada.

Muhimu zaidi, kampuni inakabiliwa na hatari ndogo ya mkolezo wa wateja, huku wateja wake 10 wakubwa wakichangia asilimia 21 tu ya mauzo yote, jambo linalohakikisha kuwa hakuna mteja mmoja anayeweza kuvuruga mapato yake.

Mtazamo wa Kifedha na Tathmini

Ikirejelea utendaji wake thabiti—ikiwemo kudumisha EBIT margins katika kiwango cha 12-15% kwa robo 15 zilizopita—Jefferies imeongeza multiple ya tathmini ya lengo la Polycab hadi 41x ya mapato. Dalali huyo anatarajia CAGR ya faida kwa kila hisa (EPS) ya 22% kati ya FY26 na FY29, ikisaidiwa na ukuaji endelevu wa kiasi na maboresho ya margin katika sekta ya FMEG.

Mambo Muhimu ya Kuzingatia

• Uongozi wa Soko: Polycab imekaribia kuongeza mara mbili sehemu yake ya soko rasmi katika sekta ya C&W kutoka 18% katika FY20 hadi zaidi ya 30% katika FY26.
• Maeneo ya Ukuaji ya Kimkakati: Kampuni imejipanga kunufaika sana na ongezeko la vituo vya data na miradi mikubwa ya miundombinu ya serikali kama BharatNet.
• Mwelekeo Imara wa Kifedha: Wachambuzi wanatabiri CAGR ya EPS ya 22% hadi FY29, ikisaidiwa na mchanganyiko wa mapato uliotawanywa na rejista ya oda imara ya Rs 11,300 crore.