Hold Polycab India; target of Rs 7000: ICICI Securities

ICICI Securities research report on Polycab India

Polycab announced an impressive set of numbers in Q1FY26. Highlights: (1) Polycab reported strong double-digit growth across cable and wire and FMEG segments. Growth in cables and wires is led by higher government expenditure, better project execution and superior revenue mix. Cables continued to outpace wires. Additionally, its international business revenues grew 24% YoY. (2) Fans segment saw a muted performance due to unseasonal rainfall; however, solar products’ growth doubled YoY. (3) EBIT margin expansion is supported by a move towards premium products and operating leverage. (4) We model the ongoing infrastructure/ capex cycle to continue to create multiple growth opportunities. Increase in manufacturing of electronics as well as backward integration also creates additional tailwinds. (5) Sustained profitability of FMEG business also augurs well for long term EVA creation.

Outlook

We believe, the strong revenue growth trajectory will likely continue in FY26E led by favourable demand tailwinds. Maintain HOLD with a DCF-based revised TP of INR 7,000 (implied target P/E of 34x FY27E EPS).