Polycab Q1 Review: Brokerages Lift Target Price, But Goldman Sachs Sees Peak Margins In Cables

Brokerages largely remained constructive on Polycab India Ltd. after its June-quarter FY27 earnings, with Citi, Jefferies and Goldman Sachs raising their target prices following another quarter of healthy execution. 

While analysts applauded the company’s strong performance in the Fast Moving Electrical Goods (FMEG) business, they believe the pace of growth in the core cables and wires segment will remain the key monitorable going forward.

The Street broadly agreed that Polycab delivered a steady quarter, supported by strong revenue growth and resilient profitability. 

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However, opinions differed on the outlook for the cables and wires business, with Goldman Sachs cautioning that volume growth has remained subdued for a second straight quarter and margins may have peaked as fresh industry capacity comes on stream.

Here’s What Brokerages Said After The Results:

Goldman Sachs 

• Maintained Neutral and raised the target price to Rs 8,920 from Rs 8,730.
• Said the June-quarter performance was largely in line with expectations.
• Noted the key positive surprise came from robust growth and profitability in the FMEG business.
• Flagged that this was the second consecutive quarter of muted volume growth in the cables and wires segment.
• Believes margins in the cables and wires business have likely peaked as incremental industry capacity comes online.

Jefferies 

• Maintained Buy and increased the target price to Rs 11,100 from Rs 10,920.
• Described Polycab as “a steady hand, delivering through cycles.”
• Highlighted that the company has delivered 16 consecutive quarters of double-digit growth in cables and wires sales while sustaining 12-15% EBIT margins.
• Continues to view Polycab as a play on India’s power and capital expenditure cycle.
• Estimates an FY26-FY29 EPS CAGR of 22%.

Citi 

• Maintained Buy and raised the target price to Rs 10,900 from Rs 10,500.
• Said strong execution in the cables and wires business continued during the quarter.
• Highlighted the FMEG segment as the key positive surprise.
• Believes acceleration in cables and wires volumes will be the next trigger for a re-rating.
• Continues to rate Polycab as its top pick in the Consumer Durables and Electricals space.

Polycab Q1 Show

Polycab reported a 32.5% year-on-year (YoY) increase in net profit to Rs 784 crore for the June quarter, while revenue from operations rose 39% to Rs 8,210 crore.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) increased 32.5% to Rs 1,136 crore, although the EBITDA margin narrowed to 13.8% from 14.5% a year ago.

Its core Wires & Cables business, which accounts for the bulk of revenue, posted a 38% rise in revenue to Rs 7,202 crore, while segment EBIT grew 25% to Rs 959 crore.

The FMEG business delivered an even stronger performance, with revenue jumping 68% year-on-year to Rs 761 crore, while EBIT surged to Rs 60.6 crore from Rs 9.5 crore a year earlier.

On the Q1 performance, Chairman and Managing Director Inder T. Jaisinghani said the company entered FY2027 with its highest-ever first-quarter revenue and profit, backed by healthy domestic demand in wires and cables, improving profitability in the FMEG business and a strong order book in its international operations.

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