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.

Diversified Revenue Streams and Low Concentration Risk

Polycab’s business model is built on resilience through diversification. Its revenue mix is well-distributed across several sectors:

Crucially, the company faces low customer concentration risk, with its top 10 customers contributing only 21% of total sales, ensuring that no single client can destabilize its earnings.

Financial Outlook and Valuation

Reflecting its consistent performance—including maintaining EBIT margins in the 12-15% range over the last 15 quarters—Jefferies has increased Polycab’s target valuation multiple to 41x earnings. The brokerage expects a strong Earnings Per Share (EPS) CAGR of 22% between FY26 and FY29, underpinned by sustained volume growth and margin improvements in the Fast Moving Electrical Goods (FMEG) segment.

Key Takeaways