Polycab India: Structural Tailwinds Intact Despite Temporary Global Disruptions

CMP: INR 8,416 Target Price: INR 8,950 (INR 7,800)  6%

India’s wires and cables leader POLYCAB continues to demonstrate strong execution despite temporary geopolitical disruptions and commodity volatility. The company reported another record quarterly performance, supported by market share gains, strong domestic demand and broad-based growth across segments.

While margins remained under pressure due to higher commodity prices and product mix changes, the long-term structural growth story remains intact, driven by increasing demand from infrastructure, defence, real estate, renewable energy and data centre projects.

Strong Revenue Visibility Continues

Polycab reported robust financial performance with revenue expected to rise from Rs. 2,24,083 million in FY25 to Rs. 4,15,350 million by FY28. Net profit is projected to grow from Rs. 20,200 million to Rs. 38,862 million during the same period.

Cable & Wire Business Remains Key Growth Driver

The Cable & Wire (C&W) segment remained the major contributor to growth, with revenues rising 29% YoY despite temporary global disruptions and muted export sentiment.

A major highlight was Polycab’s domestic market share expansion. The company gained nearly 400 basis points in FY26, taking its domestic C&W market share to around 30–31%, strengthening its leadership position in the organised wires and cables industry.

The company also implemented cumulative price hikes of around 18–19% during Q4FY26 to offset higher commodity prices. Since Polycab follows a hedging mechanism, it does not significantly benefit from inventory gains during commodity rallies.

However, margins remained under pressure because of:

• higher institutional sales contribution,
• lower export mix,
• elevated raw material costs,
• and temporary geopolitical disruptions.

Margin Pressure Appears Temporary

Although EBITDA margins contracted due to commodity inflation and export disruptions, the overall operational profile remains healthy.

Importantly, Polycab continues to maintain strong pricing power, which is critical in commodity-linked businesses.

FMEG and Export Outlook Improving

The Fast Moving Electrical Goods (FMEG) business reported healthy broad-based growth across categories, indicating improving consumer demand.

International business performance remained impacted due to Middle East disruptions. However, management remains optimistic about medium-term export growth, particularly from:

• North America,
• Europe,
• industrial infrastructure demand,
• and energy transition projects.

Balance Sheet Remains a Major Strength

One of the biggest positives remains Polycab’s balance sheet quality.

Despite capex of nearly Rs. 14.8 billion under Project Spring during FY26, the company ended the year with net cash of Rs. 41.9 billion.

This gives the company:

• strong expansion flexibility,
• lower financial risk,
• and ability to capitalize on future demand cycles.

Structural Tailwinds Continue

Polycab remains one of the strongest beneficiaries of India’s long-term infrastructure and electrification cycle.

Key growth drivers include:

• data centre expansion,
• defence manufacturing,
• EV infrastructure,
• renewable energy,
• real estate construction,
• and government infrastructure spending.

The organised wires & cables industry is also witnessing formalisation, helping large branded players like Polycab gain market share from smaller unorganised competitors.

Valuation & Outlook

Despite strong operational performance, valuation multiples are gradually cooling as earnings growth catches up.

The company’s revised target price of Rs. 8,950 reflects confidence in sustained medium-term growth and market leadership.

Analysis Library View

Polycab continues to remain a high-quality structural growth story in India’s electrical infrastructure space. Temporary global disruptions and commodity volatility may create short-term earnings pressure, but the broader growth trajectory remains intact.

The combination of:

• strong market share gains,
• robust balance sheet,
• pricing power,
• sectoral tailwinds,
• and expanding manufacturing capabilities

positions the company favourably for long-term compounding.

Analysis Library View: Positive

For long-term investors, Polycab continues to remain one of the strongest plays on India’s infrastructure and electrification growth cycle.