POLYCABIND CMP 6206 ENTRY AT 6030 TARGET 6445-6960, SL 5785.

POLYCABIND CMP 6206 ENTRY AT 6030 TARGET 6445-6960, SL 5785.

The stock has given an upside breakout to a price consolidation between Rs.6220-5820. Entry at a pullback price around Rs.6030 is advisable for a potential long term target at around Rs.6960 with a risk below Rs.5785.

Polycab shares have another 20% upside, Jefferies says with another target above ₹7,000.

The brokerage has a "buy" recommendation on the stock.
Jefferies said that despite the 25% uptick from March 2025, Polycab is trading at 34x its financial year 2026 earnings estimates, which is just 4% higher than its historic five-year average.

Jefferies said that despite the 25% uptick from March 2025, Polycab is trading at 34x its financial year 2026 earnings estimates, which is just 4% higher than its historic five-year average.

In financial year 2025, the company witnessed a further 1% market share gain in organised cables and wires segment, which is now at 26%-27% compared to 18% in financial year 2020, Jefferies said, adding that a timely capex of ₹2,800 crore in the last four years, aided the Compounded Annual Growth Rate (CAGR) of 26% in Polycab's sales in the cable and wires segment.

The fast moving electrical goods (FMEG) segment, which makes up 10% of Polycab's sales, turned profitable after 10 quarters.

Jefferies said it estimates the FY25-28 earnings-per-share CAGR to be over 26%, driven by strong order book and better FMEG margins.

Polycab has provided a healthy outlook for the next five years:

• Cables & wires business: 1.5x of market growth in core segments

• FMEG business: 1.5-2x of market growth

• Cables and wires EBITDA margin: 11-13%

• FMEG EBITDA margin: 8-10%

• Capex: ₹6,000 crore to ₹8,000 crore

• Dividend payout ratio: More than 30%

• Exports contribution: over 10%

In view of the strong order book in cables and wires (especially Bharat Net), we raise the FY27-28 earnings-per-share estimate by 2.4%, retain price-to-earnings ratio at 33x, in-line with historical five-year average.

Company profile :

Polycab India Ltd, established in 1964 by Thakurdas Jaisinghani in Mumbai, began as a small trading venture in electrical products. It formally entered manufacturing in 1983 with its Halol, Gujarat plant. Today, Polycab is India’s largest integrated wires, cables, and fast-moving electrical goods (FMEG) company, operating globally across over 70 countries.

Polycab operates primarily through three segments:

·         Wires & Cables (~88% of revenue): Including household wire, power cables, specialty cables, and high-voltage (HV/EHV) products. It commands a 25–26% market share and is the country’s leading cable manufacturer.

·         Fast-Moving Electrical Goods (FMEG) (~7%): Consumers include electric fans, LED lighting, switchgear, switches, solar products, water heaters, pumps, conduits, and appliances.

·         EPC Services (~5%): Engineering, procurement, and construction projects in power distribution and rural electrification.

The company operates 28 manufacturing plants across India (Gujarat, Maharashtra, Uttarakhand, Tamil Nadu, Daman) and maintains 29 warehouses to support pan-India distribution.

Strategic Alliances & Manufacturing Excellence

Polycab has entered several notable joint ventures:

·         With Nexans (France) for specialized rubber cables (2008/2013)

·         With Trafigura, for copper rod manufacturing to support backward integration

All manufacturing units adhere to high-quality standards, with certifications such as ISO 9001, ISO 14001, OHSAS 18001, and UL/NABL-accredited labs. Cables comply with BIS, BASEC, UL, and IEC specifications.

Growth Drivers & Innovation Strategy

·         Executing “Project LEAP”, a transformational roadmap aimed at achieving ₹20,000 crore in revenue by FY2026 through scale-up in wires, cables, and FMEG.

·         Expanding in HV/EHV cables, backed by technology from Switzerland’s Brugg Cables—enabling entry into a ₹4-5 k cr market.

·         Diversification into FMEG via premium branded offerings:

o    IoT-enabled fans (Polycab Purocoat)

o    Switches (Evina, Levana+)

o    LED luminaires and solar products.

·         Significant expansion of international footprint—exports growing ~50% YoY and now contributing ~10% of total revenue.

Thus, Polycab is a powerhouse in India’s electrical goods sector—anchored by its dominant position in wires and cables, rapidly growing FMEG business, and rising exports. Through transformational initiatives like Project LEAP, product premiumization, and quality-focused expansion into HV/EHV cables, the company is well-positioned to sustain growth. Despite occasional regulatory challenges and intensifying competition, Polycab's disciplined financials, technological edge, and commitment to sustainability indicate robust long-term prospects.