Buy Polycab India; target of Rs 8130: Motilal Oswal

Motilal Oswal's research report on Polycab India

Polycab India (POLYCAB)’s revenue jumped ~26% YoY to INR59.1b (~5% beat) in 1QFY26, led by robust volume growth in Cables and Wires (C&W). EBITDA rose ~47% YoY to INR8.6b (~16% beat), and OPM surged 2.1pp YoY to 14.5% (+1.4pp vs. our est.). PAT grew ~50% YoY to INR5.9b (~17% beat). Management indicated that C&W continues to deliver s rong growth led by robust domestic demand and supportive commodity prices. It retains its long-term margin guidance of ~11-13%, considering geographical mix, volatility in commodity prices, capacity expansion, and expected rise in A&P spending. FMEG saw its second consecutive profitable quarter, led by premiumization, a better product mix, and operating leverage benefits. POLYCAB is confident of achieving its long-term targets of project Spring.

Outlook

Which will further improve its liquidity position (estimate net cash to improve to INR45.6b in FY28E vs. INR31.0b as of Jun’25). We reiterate our BUY rating on POLYCAB with a TP of INR8,130 (based on 40x Jun’27E EPS).