Buy Polycab India; target of Rs 7152: Prabhudas Lilladher

Buy

Prabhudas Lilladher's research report on Polycab India

Polycab reported mid teen volume growth in its W&C segment. Domestic W&C business grew by 26.5% YoY, driven by mid-teen volume growth. Within this, domestic cables grew at a faster pace in the high teens, while wires registered high single-digit growth. Polycab holds 27% market share in domestic organized Wires & Cables industry. However, the company's international business declined by 23.6% YoY in Q4FY25 due to rollover of a large order into Q1FY26. contribution of exports to total revenue stood at 4.7%/6% in Q4FY25/FY25 and company aims to increase its export contribution to 10% by leveraging strong order book execution across the Middle East, Europe, and Australia. Its FMEG segment turned EBIT positive after ten successive quarters of strategic investment in talent, product innovation and brand building. Company has successfully surpassed its revenue guidance of Rs 200bn under project LEAP in FY25 a year ahead of schedule and now aims to achieve 1.5xsector growth in volume and target EBITDA margin at 11-13% over the next 5 years through its Project Spring, aiming for Rs400-500bn revenue during this period.

Outlook

We expect revenue/EBITDA/PAT CAGR of 15.9%/16.2%/15.3% over FY25-27E. We maintain ‘BUY’ rating, with TP of Rs 7152 (same as earlier) valuing at SOTP, implying PE of 40x FY27E.

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Polycab India - 07052025 - prabhu