HSBC has maintained its “buy” rating on Polycab and has increased its price target to ₹9,500 per share from the previous ₹8,500 apiece. This indicates an upside of 12.9% from its previous closing price.
The brokerage said Polycab’s revenue growth in the fourth quarter was realisaiton-led, while its product mix and higher costs weighed on profitability.
HSBC said its execution-driven market share gains in wires and cables and the FMEG margin expansion is set to drive an estimated 20% earnings per share (EPS) compound annual growth rate (CAGR) for Polycab over financial year 2026-2029.
The brokerage said it liked that the company’s domestic demand remained robust, driven by sustained government capex, a pick-up in private capex and steady housing demand.
It said Polycab improved its market share to around 30%-31% in the domestic organised W&C sector in FY26, driven by distribution network expansion, investments in manufacturing and brand, and premiumisation.
Polycab’s FMEG segment sustained growth momentum, driven by broad-based growth across segments, with solar growing 2x and emerging as the largest segment within the business.
It said working capital improved to 24 days compared to 44 days in FY25, led by higher payable days due to increased use of letters of credit for raw materials procurement. The management expects it to normalize to 45-50 days.
Polycab also hiked prices by 18-19% to offset the input cost inflation during the quarter. HSBC said the negatives for it were Polycab’s growth being largely realisation-led, with lower single-digit volume growth.
HSBC said Polycab is a key beneficiary of the Centre’s infrastructure push, investment in private sector capex and real estimate. Its dominant position in B2B, expansion in the B2C segment, ramp up of its international business and strong execution capabilities should drive strong earnings growth momentum in the medium term, the brokerage said.
Polycab’s downward risks include sharp volatility in commodity prices, particularly copper and aluminum, it added.
Of the 34 analysts who have coverage on Polycab, 25 have a “buy” rating, seven have a “hold” rating and two have a “sell” raitng.
Polycab shares were trading 6.4% up at ₹8,955 apiece at 11.25 am on Wednesday. The stock has risen 23.9% in the past month.
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