Polycab India, a leading fast-moving electrical goods (FMEG) company, witnessed its shares climb to an all-time high of Rs 8,988 on Thursday, marking a 6.78% increase from its previous close. This significant rally was fueled by the company's strong fourth-quarter financial performance, which exceeded street expectations in both revenue and margins.
Q4 and Annual Performance Highlights
For the fourth quarter, Polycab India reported a consolidated revenue of Rs 8,865 crore, a substantial 27% year-on-year increase. Consolidated EBITDA rose 13.3% to Rs 1,160 crore, while adjusted net profit saw a 6.3% rise year-on-year, reaching Rs 770 crore. This robust performance was primarily driven by the strong showing of its cables and wires (C&W) segment and consistent execution in the FMEG business.
The company also celebrated its best annual performance to date in FY26. Revenue soared 29% year-on-year to Rs 28,884 crore, EBITDA climbed 35% to Rs 4,006 crore, and profit after tax increased by 32% to Rs 2,708 crore. Net profit margins improved to 9.4%. In a move that further boosted investor confidence, the board approved a 470% dividend for FY26, translating to Rs 47 per share.
Analyst Outlook and Price Targets
Following the impressive results, several brokerage firms reiterated their positive stance on Polycab India's stock:
- Nuvama: Maintained a 'buy' call and raised its price target to Rs 9,800 (from Rs 9,350), citing higher revenue growth in the C&W business and improved FMEG margins. Nuvama expects Polycab to achieve a 19% CAGR in revenue and EBITDA, and 18% in PAT over FY26-28.
- Motilal Oswal: Assigned an upside of 16%, setting a fresh target of Rs 9,800. The brokerage highlighted Polycab's proactive capital expenditure, which ensures no capacity constraints and positions it well to capture demand recovery.
- ICICI Securities: Issued an 'Add' call, increasing its target price to Rs 8,950. The firm believes Polycab is well-positioned to benefit from structural demand tailwinds in data centers, defense, infrastructure spending, and real estate, expecting a revenue/PAT CAGR of 19.9%/20.6% over FY25-28.
- JM Financial: Maintained a 'Buy' call with a target price of Rs 9,700, raising its FY27E/28 EPS estimates by 4-5%.
Management Guidance and Future Prospects
Polycab's management has projected sustainable margins in the range of 11% to 13% in the long term. They anticipate the company's growth to be 1.5 times the industry average, with exports expected to scale from 5% to 10% of revenues by FY30. Current capacity utilization stands at 75%, supported by aggressive capital expenditure to prevent bottlenecks and sustain growth.