Polycab India shares rise 5%: 4 key reasons why Jefferies expects 30% gains despite Ultratech’s entry in C&W segment | Stock Market News

Stocks to Buy: Polycab India share price rebounded almost 5% during the Intraday trades on Monday. Polycab India Share price along with other Cable and wires (C&W) manufacturers share prices had been battered significantly on Friday following news flow regarding UltraTech Cement’s entry in to the segment. The gains on Monday are likely to have been supported by the fact that Jefferies India Pvt Ltd said it does not expects any major impact of UltraTech’s entry in the Cables and Wires segment and see more than 30 upside for the stock from hereon.

Polycab India share price that opened at ₹4849.95 on the BSE on Monday, almost 3% higher than the previous days close of ₹4710.65. The Polycab India share price thereafter gained to intraday highs of ₹4937.50, whcih meant gains of almost 5%.

Polycab India: 4 key reasons for Jefferies being Bullish

1.Why Jefferies likes Polycab- With about 25% organized market share, Polycab leads the domestic C&W market. The company is present in both cables (65% of the sales mix) and wires (25–30% of the mix). Due to fresh worries about competition, the stock has dropped over 20% over the last two sessions.

It is currently trading below its historical trading average at 27x FY26 estimates. Jefferies project a robust sales and net profit annual growth ( CAGR) of 22% and 28% respectively for FY25–27, led by improvements in FMEG margins, new orders (like Bharat Net), and C&W volumes.

2. Healthy medium term outlook

Polycab’s recent Project ‘Spring’ has given the following positive forecast for the upcoming five years: 1) C&W business: ~1.5x of market growth in core segments 2) C&W business: about 1.5 times market growth in key categories; 3) C&W EBITDA margin: 11–13%; 4) FMEG EBITDA margin: 8–10%; 5) Capex: Rs6000–8000 Crore 6) Dividend payment ratio of more than 30% and 7) Export contribution of more than 10%.

3. Export Opportunities

The United States, the Middle East, Europe, and Australia are Polycab’s top export markets, while exports accounted for 7-8% of sales in the 9MFY25 fiscal year. In the US, the company is switching to a distribution-led approach. By FY30, exports are expected to account for about 10% of sales.

4. Jefferies expects no major impact of Ultratech’s C&W venture as they say the venture won’t have an effect on earnings until 2027. However, they reduce Polycab’s target PE by almost 15% to 32 times, which is currently in line with its historical 5-Year avg (from 38 times previously), taking into account the wider market slump and the uncertainty surrounding the impact of competition after 2027. With a downward revised target of ₹6,485, they advice holding onto your purchase. Increased competition and a downturn in demand are major threats.

The Jefferies target price indicates more than 30% upside from ₹4900 level Polycab India share price is trading at

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.