What was once a sharp sell-off by the Street amid concerns over rising competition, Polycab India shares have since made a stellar comeback, emerging as one of the biggest turnaround champions of 2025.
A leading player in the domestic organized C&W segment, the shares have recovered 59% from the February lows to trade at the current value of ₹7,252, and remarkably, it has closed all of the last seven months in green (including September) and also scaled to a fresh record high of ₹7,714 apiece last week.
What contributed to the stock’s stellar reversal?
Investors’ earlier concerns about the entry of new players into the cables and wires segment have eased. Combined with reasonable valuations, growing financials, an improving demand outlook, and earnings upgrades from analysts, these factors have helped the stock maintain its steady winning run.
Motilal Oswal believes that competitive intensity in the sector is unlikely to be as high as initially anticipated, despite entry announcements by new players such as Ultra Cement and the Adani Group.
Ultra Cement has since clarified that it does not intend to accelerate its planned ₹18 billion investment beyond what was announced on February 25 for its foray into the C&W sector. Similarly, no concrete plans have emerged from the Adani Group following the establishment of Praneetha Ecocables, a JV by its subsidiary Kutch Copper, in March 2025.
Meanwhile, the brokerage expects that demand for wires and cables will remain robust in the coming years, driven by infrastructure development, expansion in the power sector, growth in new avenues such as data centers and electric vehicles, and ongoing traction in real estate and individual housing.
The brokerage also finds that rising raw material prices, such as copper and aluminum, will not impact margins, as companies are expected to pass on price increases to customers.
It expects that the combination of rising RM prices and healthy volume growth will translate into near-term price increases of 3% for wires and 4–5% for cables, sustaining robust revenue growth.
In recent years, Polycab has improved its market share to 26–27% from 18–19% in FY20. Under its Project Spring, the company aims to grow its C&W business at 1.5x the industry growth rate, continue gaining market share, and maintain healthy margins of 11–13%.
Motilal Oswal sees stock crossing ₹8,700
The brokerage remains positive on Polycab, given its leadership position in the C&W segment, positive sector outlook, robust balance sheet, and strong return ratios, and has retained its ‘buy’ rating on the stock with a price target of ₹8,750, based on 40x September 27E EPS.
It estimates a CAGR of 18%, 22%, and 21% in revenue, EBITDA, and EPS over FY25-28 and stated that the company has benefited from continuous capacity expansions while sustaining healthy margins in the C&W segment.
Motilal Oswal projects a stable margin of 14% over FY26-28, supported by the company’s operational strength, an expected increase in contribution from the EHV capacity from FY27, and export growth.
The brokerage estimates cumulative FCF at ₹42.4 billion over FY26-28, despite increased capex intensity, and projects net cash to improve to ₹47.3 billion by FY28, up from ₹31.0 billion as of June 25.
Earlier, Jefferies also retained its ‘buy’ call on the stock with a target price of ₹8,180 apiece, citing the company’s consistent double-digit sales growth in the cables and wires segment over the past 12 quarters.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
