The target suggests a potential upside of around 10% from current levels.
Following a meeting with the company’s management, Citi said domestic demand has rebounded after a softer March quarter, which was impacted by geopolitical tensions in West Asia. Management indicated that secondary sales improved from early April, while channel inventories have returned to normal levels.
The company reported mid- to high-single-digit volume growth during April and May despite a strong base from the same period last year, when volumes had grown by more than 25%.
To offset higher raw material costs and the impact of currency depreciation, Polycab implemented another round of price increases of around 8-10% during the first quarter.
On the international business front, management expects exports to outpace domestic growth in FY27, led by a recovery in demand from the US, rising customer enquiries and expansion into new markets.
Citi also mentioned the company’s extra high voltage (EHV) business as a key growth opportunity. Most of the planned capex of about ₹800 crore has already been completed, and management sees the potential to generate revenue of nearly ₹2,400 crore from the segment.
The brokerage said that margins in the cables and wires business are expected to remain near the upper end of the company’s guided 12-14% range.
Meanwhile, government-led projects such as BharatNet and the Revamped Distribution Sector Scheme (RDSS) are expected to contribute ₹1,800-2,000 crore in revenue during FY27.
Of the 33 analysts that have coverage on the Polycab, 24 of them have a ‘Buy’ rating, seven has a ‘Hold’ recommendation, while two have ‘Sell’ call on the stock.
Shares of Polycab India are trading 0.031% higher today at ₹9,559. The stock has risen 25% so far this year.
