Target: ₹9,600
CMP: ₹8,504
We met the management of Polycab to discuss business trends in the Cables & Wires (C&W), FMEG and EPC segments, raw material price trends, key strategic initiatives and channel inventory. Here are the key highlights of the discussion:
Channel inventory, which had risen to 40-45 days in Q3FY26 (vs normal 21-24 days), normalised within the first 20 days of January 2026 amid strong demand recovery. The company has now passed on the entire cost increase (vs about 70 per cent in Q3), driving margin recovery in Q4-FY26.
It has gained meaningful market share in 9MFY26, growing well ahead of industry and it has reiterated its 1.5x industry growth target till FY30 under Project Spring. Real estate demand remains strong, while affordable housing and the government’s City Economic Region push should further support wire demand.
Unorganised players account for about 40 per cent of wires, and Polycab sees limited impact from new entrants. The company holds about 30 per cent share in organised wires, aided by a strong network of dealers and distributors (200k+ electricians/retailers), structured loyalty programmes, and 34 warehouses enabling 24-hour replenishment. Exports form about 6 per cent of revenue.
We remain structurally positive on Polycab, supported by its leadership in the C&W segment, a favourable industry outlook, a strong balance sheet and healthy return ratios, providing visibility for steady growth and capital efficiency. We reiterate our Buy rating with a TP of ₹9,600.