- You may have overlooked a 46% revenue jump—Polycab India is redefining growth in the wires & cables space.
- Margin compression is temporary; commodity inflation is easing, and price pass‑through is catching up.
- Higher capacity utilisation and solar‑driven FMEG expansion position the stock for 30%+ EPS upside by FY28.
- Buy rating with a 12‑month target of ₹9,073 implies a 38x FY28e EPS multiple—still attractive versus peers.
- Sector‑wide capex tailwinds and real‑estate demand underpin a sustainable demand runway.
You missed Polycab’s Q3 explosion because you ignored the earnings flash.
Polycab India (NSE: POLYCAB) delivered a jaw‑dropping 46% year‑on‑year revenue surge and 36% earnings growth in the quarter ending September 2025. The lift came from a blend of robust execution in its core Wires & Cables (W&C) franchise and a surprisingly resilient Fast‑Moving Electrical Goods (FMEG) segment powered by solar‑related demand. While margins slipped under the weight of commodity inflation and a staggered price‑pass‑through strategy, the fundamentals are solid, and the upside potential is far from exhausted.
Polycab India’s Q3 Performance Beats Expectations
Revenue climbed to ₹7,200 crore, up from ₹4,920 crore a year ago, driven by a 52% increase in W&C sales volume. The company’s FMEG division, which includes lighting, switches, and solar inverters, posted a 28% top‑line jump, reflecting the broader renewable‑energy push across India’s construction pipeline. Net profit rose to ₹830 crore, translating to an EPS of ₹42.5, up from ₹31.3 a year earlier.
From a valuation perspective, the stock traded at roughly 30x trailing FY27 EPS after the results—a discount to the sector’s average of 34x, leaving room for multiple expansion as the market re‑prices the growth story.
Why Polycab India’s Margin Pressure Is Temporary
The headline margin dip (EBITDA margin fell from 20.4% to 18.7%) stems from two identifiable forces. First, copper and aluminum prices surged 22% YoY, inflating raw‑material costs. Second, Polycab adopted a disciplined, staggered price‑pass‑through rather than a blunt, one‑time hike, preserving client relationships but delaying full cost recovery.
Commodity pricing is now stabilising; copper futures have retraced 8% over the last quarter, and the company’s procurement hedging program is expected to lock in 60% of future inputs at near‑current levels. Moreover, with capacity utilisation now above 85%—up from 70% in FY25—the fixed‑cost base is spreading over larger volumes, naturally lifting the margin trajectory. Analysts project EBITDA margins to rebound to 19.5% by FY28 as price pass‑through completes and input costs normalise.
Sector Trends: Capex, Real‑Estate, and Solar Power Driving Demand
India’s infrastructure pipeline is on a historic upswing. The government’s FY26‑30 capital expenditure plan earmarks over ₹30 lakh crore for power transmission, metro rail, and smart‑city projects—directly feeding the demand for high‑quality conductors and cables. Simultaneously, the residential real‑estate market is buoyed by low‑interest rates, translating into a steady flow of new housing units that need wiring, lighting, and switchgear.
The renewable‑energy thrust adds another layer. The National Solar Mission aims for 280 GW of solar capacity by 2030. Polycab’s FMEG line, especially its solar inverters and DC‑AC converters, is positioned to capture a slice of this growth, benefitting from both domestic installations and export opportunities under the “Make in India” incentive.
Polycab India vs. Peers: Tata Power & Adani Total Power
When you stack Polycab against peers like Tata Power’s cable arm and Adani Total Power’s transmission business, a few differentiators emerge:
- Vertical Integration: Polycab manufactures its own copper rods, reducing reliance on external suppliers—a cost advantage that Tata Power lacks.
- Product Mix: While Tata focuses heavily on high‑voltage transmission cables, Polycab’s diversified FMEG portfolio captures both construction‑grade and consumer‑grade demand.
- Margin Resilience: Adani’s transmission segment posted a 24% EBITDA margin in FY25, but its growth is tied to long‑term power‑purchase agreements. Polycab’s margin volatility is more tied to commodity cycles, which are now stabilising.
Overall, Polycab offers a higher growth ceiling with a balanced risk profile, making it an attractive complement to a broader power‑infrastructure allocation.
Historical Context: What Past Capex Waves Teach Us
Looking back at Polycab’s FY22‑FY24 trajectory, each time the government announced a major infrastructure budget, the company’s revenue CAGR accelerated by 12‑15% in the following 12‑18 months. For instance, after the 2022 “National Infrastructure Pipeline” announcement, Polycab’s Q4 FY22 revenue jumped 18% YoY, and the stock appreciated 40% over the next year.
This pattern suggests that the current FY26‑30 capex surge could replicate—or even exceed—historical growth bursts, especially when paired with the solar‑energy push. Investors who entered before the FY22 surge enjoyed multi‑fold returns, reinforcing the case for early positioning now.
Investor Playbook: Bull and Bear Scenarios for Polycab India
Bull Case: Commodity inflation eases, price pass‑through completes, and capacity utilisation climbs to 90%+ by FY27. Margin recovery drives EBITDA to 20%+, while the FMEG solar line contributes an additional 12% to top‑line growth. Stock re‑ratings to 42x FY28 EPS, pushing the price toward ₹9,500‑₹10,000.
Bear Case: A renewed spike in copper prices, coupled with a slowdown in capex due to fiscal tightening, compresses margins further. If price pass‑through stalls, EBITDA could dip below 17%, and the valuation multiple may regress to 30x, capping the price near ₹7,500.
Given the current fundamentals, the bull scenario appears more probable. The 12‑month target of ₹9,073 reflects a 38x FY28 EPS multiple—still modest relative to sector peers and supported by tangible growth catalysts.