The electrical wire business in India is witnessing significant growth, driven by the booming real estate sector, increasing power consumption, and enhanced access to electricity in remote villages. As urbanization accelerates, demand for residential, commercial, and industrial electrical wiring is rising. Additionally, government initiatives like the Pradhan Mantri Sahaj Bijli Har Ghar Yojana are improving electricity access to rural areas, further fueling the need for electrical wires.
Key companies in this sector include Havells India, Polycab India, and KEI Industries, all listed on the stock exchanges. These firms are capitalizing on the growing demand for high-quality and energy-efficient wiring solutions. With the ongoing infrastructure development and increasing electricity needs, the sector holds promising growth potential, making it an attractive investment opportunity.
Share Price
The shares of Polycab Limited are currently trading at Rs. 5,821 down by 1.6% from its previous close of Rs. 5,916 as of January 27, 2025. The stock also touched an intraday high of Rs. 5,879.
Recent Updates
Jefferies: Strong Q3 Performance and Optimistic Outlook
Polycab’s stock has struggled in 2025, with a 15% decline year-to-date, but Jefferies remains positive about the company’s future. The brokerage highlighted Polycab’s strong Q3 results, where sales grew by over 20% and EBITDA surged 26% year-on-year. Jefferies has set a price target of ₹9,200, indicating a potential upside of 50% from the current stock price. The optimistic outlook is supported by a strong improvement in operating margins, reaching 13.8%, thanks to better margins in the cables and wires segment and reduced losses in the FMEG division.
Jefferies’s Rationale: Solid Growth Across Key Segments
The rationale behind Jefferies’ bullish stance lies in Polycab’s consistent growth across key business segments. The company’s cables and wires segment, in particular, has seen solid performance, contributing significantly to the company’s overall growth.
Despite some challenges in the FMEG division, where losses were reduced, Jefferies sees strong potential for margin improvement and expects the company to maintain its growth momentum. The brokerage believes that Polycab’s focus on higher-margin segments and cost efficiencies will sustain its profitability.
UBS: Recovery on the Back of Government Spending
UBS also maintains a ‘Buy’ rating on Polycab, setting a target price of ₹9,000 per share. While the brokerage noted that the company’s cable and wires growth of 12% in Q3 fell slightly short of expectations, it remains optimistic about Polycab’s recovery driven by increased government spending.
UBS believes that the government’s infrastructure investments will positively impact demand for cables and wires, which could boost Polycab’s performance in upcoming quarters. Additionally, UBS highlighted the company’s improving margins in the FMEG segment, with PBIT margins rising from 3% to 6.4% quarter-on-quarter.
UBS’ Rationale: Export Growth and Positive FMEG Outlook
UBS’s confidence is also bolstered by Polycab’s export business, which contributed 8.3% of revenue in Q3FY25. The brokerage anticipates continued strong demand from international markets, helping the company diversify its revenue sources and expand its global footprint.
With the FMEG segment showing improvements in margin performance, UBS is optimistic that Polycab will continue to benefit from both domestic and international demand, fueling long-term growth.
Citi: Strong Margin Expansion and Robust Earnings
Citi, another major brokerage, has reaffirmed its ‘Buy’ rating on Polycab, setting a price target of ₹8,600. Citi reported a 20% year-on-year increase in revenue and a 26% rise in EBITDA, which surpassed expectations by 15%.
The brokerage praised Polycab’s ability to improve its margins, particularly in the Wires & Cables segment, where margins increased by 119 basis points quarter-on-quarter. This margin expansion, combined with a higher share of export revenue, played a significant role in the company’s strong earnings performance.
Positive Guidance by Management
Polycab’s management has outlined a positive future outlook, projecting a capex range of ₹6,000 crore to ₹8,000 crore, with a focus on expanding its wires and cables margin to 11-13% and improving FMEG EBITDA to 8-10%.
Furthermore, the company anticipates that exports will account for more than 10% of its total revenue. This forward-looking guidance has reassured analysts, further strengthening their confidence in Polycab’s long-term growth trajectory, even as the company navigates some short-term challenges. .
Written By: Dipangshu Kundu
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