Polycab India targets growth through wires share gains and export expansion

Investment View and Valuation

Prabhudas Lilladher’s September 3, 2026 management-meet update on Polycab India maintains a BUY rating and an unchanged target price of Rs 10,764. The positive thesis is supported by structural wires and cables demand, sustained organised-market share gains, distribution reach, scale-led sourcing and a widening export opportunity.

The broker expects revenue, EBITDA and PAT to grow at CAGRs of 22.6 per cent, 23.0 per cent and 22.9 per cent, respectively, over FY26-FY28E. The target price is SOTP-based and uses 40 times FY28E P/E. Estimates remain unchanged.

Wires and Cables Growth Outlook

Management remains constructive on the wires and cables demand environment despite commodity-price volatility. Polycab India’s organised wires and cables market share increased from about 18 per cent in FY19 to 26-27 per cent in FY25 and 30-31 per cent in FY26. Management expects further gains, targeting wires and cables growth of 1.5 times industry growth and FMEG growth of 1.5-2.0 times.

Around 90 per cent of Polycab India’s sales move through distribution, including Tier 4 and Tier 5 markets. The broker identifies this reach as a competitive moat. Management also believes industry supply will remain below demand until at least FY30 despite capacity additions.

Cables account for roughly 70 per cent of Polycab India’s wires and cables business. Wire demand is supported by real estate, which accounts for about 70 per cent of the wires market and is expected by management to provide a two-to-three-year growth runway. Polycab India has created a real-estate vertical offering wires, switches, switchgear, lights and fans as a complete just-in-time solution.

Sourcing, Pricing and Margins

Backward integration, including external resin procurement and in-house compounding, together with sourcing arrangements covering over 90 per cent of procurement, supports the business. Copper is fully imported, but the company’s scale enables committed supplier volumes.

Polycab India passes through price changes monthly for cables and every 15 days for wires. Gross margin has contracted over the past three to four quarters, although management remains comfortable with a 25-26 per cent gross-margin range and expects volume-led operating leverage.

Export Opportunity and Capacity

Exports are a further growth driver. Management cited strong US demand from data centres and the energy sector. Polycab India has rebuilt its US market-representative network and established exclusive arrangements with large EPCs.

The Middle East is generating strong enquiries, especially from Oman and Saudi Arabia, while Latin America, Europe, Australia and Japan are being explored. Export EBITDA margin is currently 15-16 per cent. The broker forecasts export revenue of Rs 24 billion in FY28E, equivalent to 6.4 per cent of the wires and cables segment.

Capacity utilisation of around 70-72 per cent provides room for volume growth while the company adjusts its SKU mix across wires and low-voltage products.

Recent Operating Performance

For FY26, Polycab India reported revenue of Rs 288,837 million, EBITDA of Rs 40,056 million and adjusted PAT of Rs 26,719 million. In Q1FY27, revenue was Rs 82,097 million, up 39.0 per cent year on year; EBITDA was Rs 11,362 million, up 32.5 per cent, at a 13.8 per cent margin; and adjusted PAT was Rs 7,843 million, up 32.5 per cent.

Management expects Q2FY27 to be better than Q1FY27. BharatNet execution remains on track, but milestone-based revenue recognition can create quarterly volatility. Management expects normalisation over 10-12 months and has guided for double-digit margins on the project.

Broker Forecasts

Key Areas to Monitor

• Commodity-price volatility and recent gross-margin pressure.
• Timing of BharatNet revenue recognition and the resulting quarterly volatility.
• Elevated acceptances.
• Execution of export, FMEG and capacity-growth plans.