A foreign brokerage has retained its 'Buy' rating on Polycab India with a target price of ₹11,100, implying an upside of 31.90% from the ruling market price of ₹8,415.50. The stock rose 1.87% following the brokerage's fresh charge, as reported by Business Standard. According to the latest analysis, the company is well-positioned to capitalize on strong demand fundamentals in the wires and cables sector.
The company has demonstrated significant market expansion, with its organized wires and cables market share increasing from approximately 18% in FY19 to 30-31% in FY26. As reported by Business Standard, this growth trajectory is expected to continue, supported by the company's strong distribution network and competitive advantages in backward integration and scale-led sourcing. The fast-growing wires and cables market is expected to expand at around 11%-12% annually, providing sufficient room for another meaningful player.
The stock has come under pressure since UltraTech Cement entered the wires and cables market with its Ultravolt brand, which launched last Thursday with an investment of ₹1,800 crore, of which ₹900 crore had been incurred as of June 2026. UltraTech plans to roll out Ultravolt products across 500 districts through more than 1 lakh retailers, with commercial production started at the first phase facility in Bharuch, Gujarat, having an installed capacity of 1.1 million kilometres. However, the brokerage noted that Polycab's recent correction could present an opportunity rather than signal a major competitive threat, as the company derives around 70-75% of its cables and wires revenue from cables, while Ultravolt's initial focus appears to be on wires and low-tension cables.
Polycab India reported strong Q1 FY27 results with a 33% rise in consolidated net profit to ₹796.7 crore on a 39% increase in revenue to ₹8,209.7 crore compared to Q1 FY26. The brokerage expects the company to deliver a 22% PAT CAGR over FY26-FY29E, driven by volume growth and improving FMEG margins. The company maintains its annual capex estimate of around ₹1,400-1,500 crore for FY26-FY29E. The cables and wires industry operates at average operating margins of 10%-12% and net margins of 5%-7%, limiting the scope for sustained aggressive pricing by new entrants.
Management remains constructive on the wires and cables demand environment, with structural demand continuing to remain strong despite commodity price volatility. According to Business Standard, the management believes industry supply will remain below demand at least until FY30, despite capacity additions, supporting a favorable industry backdrop. However, the brokerage identified supply-chain disruptions, weaker demand and sharp copper-price volatility as key risks. The company's business segments include cables accounting for approximately 70% of the wires and cables business, while wires are experiencing strong demand from the real estate sector, which management expects to remain a key growth driver over the next 2-3 years.
