Jefferies maintains buy rating on Polycab India, raises target price by 17%

The firm reported a net profit of Rs 402.81 crore in June quarter against Rs 222.55 crore a year ago.

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26 Aug, 2025 12:21

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Brokerage firm Jefferies India in its recent note said that Polycab India Ltd continues to impress with its consistent and stellar performance and remained as a top small and mid-cap pick. The brokerage house has maintained buy rating on the stock and increased its target price by 17 percent to Rs 4835 a share.

Polycab continues to demonstrate consistent and strong execution, primarily fueled by improved volumes and margins in the Cables & Wires segment. Polycab's impressive performance in Q1FY24 saw sales and net profit was supported by an exceptional 88% increase in exports, accounting for 9% of total sales, reaching 72 countries. However, weaker B2C demand impacted sales and margins in the FMEG segment, which represents approximately 10% of the total sales.

The firm reported a net profit of Rs 402.81 crore in June quarter against Rs 222.55 crore a year ago. Despite facing lower commodity prices, the company's revenue for the quarter surged by 42 percent year-on-year to Rs 3,889.38 crore, up from Rs 2,736.56 crore.

The company's EBITDA margin improved 280 basis points (bps) year-on-year to 14.1 percent. This progress was primarily driven by prudent price revisions, enhanced operating leverage, and a favorable business mix.

"We firmly believe that Polycab is a compelling investment, presenting a strong opportunity in the Indian capex and housing markets, with approximately 65% of its business geared towards B2B customers. Based on the outstanding Q1 performance, we have revised our EPS estimates for FY24-26, raising it by 6-7%. Moreover, our estimated sales and profit CAGR for FY23-26 stands at an impressive +17% and +26% respectively. Polycab remains our top SMID pick, given its consistently excellent performance and promising outlook", said Jefferies India in its latest note.