Polycab India Ltd - Stock Analysis by Finology

Every time you flip a switch, plug in your phone, or turn on the AC, electricity reaches you through a wire. Scale that up across every home, hospital, factory, metro line, and solar farm being built in India today, and you begin to understand what Polycab does and why it matters. The company manufactures the wires and cables that power India, holding nearly 31% of the organised market and growing revenue nearly fourfold since its 2019 listing. But does that make it a good investment today? Let us find out.

So, What Does Polycab Actually Do?

At its core, Polycab India Limited makes wires and cables, the products that carry electricity from one place to another.

The company operates through three main business segments.

1. Wires and Cables: 

This is the largest part of the business and the biggest contributor to revenue. In FY26, the wires and cables segment generated around ₹25,179 crore, accounting for nearly 87% of total revenue. Most of this came from the domestic market, while exports contributed around ₹1,570 crore, or about 5.4% of consolidated revenue.

The products cater to different use cases. Wires are typically used inside homes and buildings for things like lights, fans, switches, and sockets. Cables, on the other hand, are used in larger applications such as power transmission, railways, factories, solar projects, data centres, and infrastructure projects.

The business is largely driven by its distribution network. Around 90% of sales come through distributors and retailers across India, which the company calls trade or channel sales. The remaining 10% comes from institutional customers such as power utilities, railways, and industrial companies through large project orders. Trade sales are usually more profitable because the company is able to command better pricing through its brand and distribution strength.

The export business has also expanded steadily over the years. The company now exports to 94 countries, compared to 48 countries in FY19.

(Source - Company)

2. FMEG

FMEG stands for Fast Moving Electrical Goods. This segment includes products consumers directly use in homes and offices, such as fans, lights, switches, switchgears, conduit pipes, and solar products.

In FY26, this business generated around ₹2,069 crore in revenue, contributing roughly 7% of total revenue, with growth of 25% YoY.

Solar products have become the fastest growing category within this segment, almost doubling in FY26, supported by rooftop solar adoption and government schemes. The company is also seeing higher contributions from premium products. Premium fans now contribute around 25% of fan revenues, while premium lighting products account for about 35% of lighting revenues.

(Source - Company)

3. EPC

In this business, Polycab does not just supply cables. It handles the complete electrical infrastructure project, from designing the system to procuring materials and executing the installation work.

In FY26, the EPC segment generated around ₹1,667 crore in revenue, contributing nearly 6% of total revenue.

Across its three businesses, Polycab India Limited reported consolidated revenue of ₹28,884 crore in FY26, growing 29% YoY and reaching its highest ever annual revenue. But the real question is whether the business is growing as strongly as these numbers suggest. To understand that, we need to look a little deeper.

(Source - Company)

Now, Let's Look at the Financial Performance:

Since listing in 2019, Polycab India Limited has grown revenue from around  ₹8,000 crore to ₹28,884 crore in FY26, a CAGR of 20% over seven years. But the key point is not just revenue growth, it is how the business has improved alongside it.

Profitability has grown faster than revenue. EBITDA margins improved from 11.9% at the time of listing to 13.9% in FY26. For a business where raw materials account for nearly 75% of revenue, margin expansion of 200 basis points over seven years reflects better scale and operating leverage.

The company has also increased its market share steadily. In FY19, Polycab held around 18% share in the organised domestic wires and cables market. By FY25, this increased to 26-27%, and in FY26, it rose further to 30-31%. This indicates that the company has been growing faster than the industry and gaining share from smaller and unorganised players.

The balance sheet has also strengthened over time. Net cash increased from ₹45 crore at listing to ₹4,194 crore in FY26. The company has minimal debt and generated ₹3,811 crore of operating cash flow during the year, more than double the previous year. It also invested ₹1,480 crore in capex, the highest in its history, while funding expansion entirely through internal cash flows.

Dividend per share has increased from ₹3 at listing to ₹47 in FY26, while the payout ratio is gradually moving toward the FY30 target of 30%. This shows the company has been able to invest for growth while also increasing shareholder payouts.

Overall, the last seven years reflect steady growth across revenue, profitability, market share, cash generation, and balance sheet strength.

(Source - Company)

But What Is Keeping This Growth Engine Running?

India added around 55-56 gigawatts of power capacity in FY26, nearly double the previous year. Every new power project needs cables to connect electricity from generation plants to the grid, and management highlighted that for every ₹100 spent on transmission and distribution, around ₹15-20 directly converts into cable demand.

The opportunity is not limited to the power sector. The Union Budget has announced government spending of ₹12.2 lakh crore for FY26, and when private sector capex is included, the total planned investment rises to around ₹36-37 lakh crore. According to management, nearly 57% of this investment is linked to sectors that require wires and cables, including utilities, manufacturing, semiconductors, oil & gas, and logistics.

Real estate is another supporting factor. The top eight Indian cities are consistently launching around 3.5 lakh housing units every year, which continues to support demand for housing wires and electrical products.

At the same time, newer sectors like data centres, defence manufacturing, and EV charging infrastructure are still in the early stages of expansion, which means the demand opportunity can continue for many years.

The size of the opportunity is also large. India’s wires and cables market was around ₹90,000 crore in FY25 and is expected to grow at nearly 9% CAGR, which can take the market to roughly ₹1.4 lakh crore by FY30.  The global Wire and Cable Market size is estimated at US$
240.98 billion in 2025, and is expected to reach US$ 314.96 billion by 2030, at a CAGR of 5.5%.

India’s share in the global wires and cables market can gradually increase, not only because domestic demand is strong, but also because Indian companies are becoming more export-ready. Players like Polycab are already expanding their international footprint, with presence across 94 countries in FY26 and international business growing from around ₹250 crore in FY19 to ₹1,570 crore in FY26. The company is also focusing on approvals from large EPC players, utilities, renewable energy developers, oil & gas companies and distributors in key markets.

So, demand for cables usually does not disappear, it only gets postponed by a few weeks or months depending on project timelines.

So how is Polycab positioning itself to capture this opportunity?

The company is executing a five-year strategy called Project Spring, covering FY25 to FY30. 

The key goals are:

• Grow the wires and cables business at 1.5x to 2x the industry growth rate
• Improve FMEG margins from mid-single digits to 8-10% by FY30
• Increase exports from 5.4% of revenue currently to more than 10% by FY30
• Invest ₹6,000-8,000 crore in capex over five years, with around 90% focused on wires and cables capacity expansion

(Source - Company)

One of the important projects is in Extra High Voltage (EHV) cables. These are the large cables used to carry high-voltage electricity from major power plants and substations to the main power grid. Currently, around 50% of India’s domestic EHV demand is met through imports. Polycab’s EHV capacity is expected to become operational by the end of 2026, with revenue contribution likely starting from FY28. This gives the company an entry into a segment where import substitution opportunities are large.

Exports are another focus area. The company has rebuilt its distribution network in the United States, which accounts for around 15-20% of the global export market and contributed nearly 40% of Polycab’s export revenue in FY26.

But Before You Invest, Here Is What to Watch Out For

Within the wires and cables segment, Polycab India Limited has a clear lead. The next largest player is only about half its size. With around 30-31% share in the organised market, Polycab has built a strong position through its wide distribution network, manufacturing scale, and backward integration. While players like KEI Industries Limited and Havells India Limited are growing, the organised market continues to consolidate and Polycab remains one of the biggest beneficiaries of that trend.

The FMEG segment is more competitive. Categories like fans, lights, switches, and switchgears already have established brands such as Havells India Limited, Orient Electric Limited, Bajaj Electricals Limited, and Crompton Greaves Consumer Electricals Limited, which have built consumer trust over many years. Polycab is still building its presence in these categories, and improving brand recall here will take time and continued investment.

On the risk side, here is what deserves careful attention:

Market share gains may slow from here. Moving from 18% to 30%-31% market share over seven years was a strong achievement, helped partly by the shift from unorganised to organised players. But gaining further share from this level becomes harder because the competition is now mainly other organised companies that are also expanding aggressively.

Margins have a structural ceiling. Nearly 70%-75% of every rupee of revenue goes toward raw material costs. Since Polycab passes commodity prices through rather than absorbing them, there is limited room to structurally expand margins beyond the current 12 to 14% guided range. The business will not become dramatically more profitable at scale the way a software or consumer brand company might.

The FMEG business is still at an early stage. The segment became profitable only in Q4 FY25, and the company is targeting 8-10% EBITDA margins by FY30. Achieving this will require competing against established brands like Havells with much stronger consumer recall and distribution in categories like fans, lights, and switches.

The EHV cable opportunity is promising, but execution will matter. Entering the Extra High Voltage cable segment means competing with global players like Prysmian and Nexans., which already have long-standing customer relationships and technical expertise. Large project wins in this segment are likely to take time, and meaningful revenue contribution is expected only from FY28 onwards.

Peer Comparison:

We have chosen KEI Industries and Havells India for comparison because these are among the large listed players in the wires and cables industry and compete with Polycab in key product categories.

Particulars	Polycab India	KEI Industries	Havells India
Mcap	₹1,38,618 crore	₹50,374 crore	₹75,823 crore
FY26 Revenue	₹28,884 crore	₹11,748 crore	₹22,528  crore
EBITDA Margin	13.90%	10.50%	10%
PAT Margin	9.40%	7.80%	7.50%
Wires & Cables Revenue	₹25,179 crore, ~87%	~₹11,220 crore, ~95.5%	₹8,677 crore, ~39%
Wires & Cables Margin	13.6% segment margin	11.6% segment margin	13.1% segment margin
Market Share	~31%	~11%	~9%

Polycab clearly stands ahead of the peer set in the wires and cables space. Its FY26 revenue stood at ₹28,884 crore, which is around 2.5x KEI’s ₹11,748 crore. Havells is larger at the company level than KEI, but cables form only around 39% of its revenue, while Polycab is much more focused on wires and cables.

The company also has better profitability, with an EBITDA margin of 13.9% and PAT margin of 9.4%. In wires and cables alone, Polycab generated ₹25,179 crore revenue with a 13.6% EBIT margin, showing the strength of its core business. KEI and Havells are also strong players, but they are still much smaller in scale.

Polycab’s real edge comes from its larger scale, around ~31% market share, stronger distribution network, backward integration and better margin profile. While KEI and Havells are strong organised players, Polycab remains the clear leader in the organised wires and cables market.

Valuation Analysis:

Valuation also does not leave enough comfort. In our valuation, we have assumed 15% EPS CAGR for the next 10 years, which is lower than Polycab’s past revenue growth of nearly 20% CAGR since listing.

This is because the next phase of growth may not be as easy as the past. Earlier, Polycab benefited strongly from the shift from unorganised to organised players and gained market share quickly. But now the market itself is becoming more organised, and competition from large players like KEI and Havells is also increasing.

We have used a 12% discount rate, as this broadly reflects the long-term return expectation from Indian equities. We have also kept a 20% margin of safety to protect against any slowdown in growth or valuation correction. Investors who want more comfort can use a higher margin of safety of 25% to 30%.

So while Polycab remains a strong business with around 30-31% market share, a net cash balance sheet, healthy cash flows, and exposure to long-term themes like power, real estate, manufacturing, data centres and infrastructure, we believe growth can gradually moderate from here. Sustaining the same high growth rate as the past may become tougher as the base becomes larger and competition becomes stronger.

(Source - Finology Ticker)

Disclaimer: This is only for educational purposes and not investment advice.

Why have we rejected Polycab India Ltd from Finology 30?

Polycab India Limited remains one of the stronger infrastructure-linked businesses in India. The company has around ~31% share in the organised wires and cables market, a net cash balance sheet, and revenue has compounded at nearly 20% annually since listing. It is also directly linked to multiple long-term growth themes like power, real estate, manufacturing, data centres, and infrastructure.

But the key issue is not business quality, it is the price we are paying today.

From here, the growth journey may become slightly tougher because the market is already becoming more organised, and competition is now coming from strong listed players, who are also expanding capacity and distribution.

At the same time, newer growth areas are still developing. The FMEG business is at an early stage, EHV cable revenues are expected only from FY28 onwards, and margin expansion has natural limits because raw materials form a major part of costs.

So going forward, execution becomes more important as the company tries to scale multiple growth drivers together while maintaining its leadership in the core business.

Before revisiting our view, these are the key things we would like to see:

• FMEG margins improving toward the 8% target guided for FY30
• EHV projects translating into actual revenue from FY28 onwards
• Exports scaling up toward 8-10% of total revenue

Another point worth noting is the recent promoter selling at higher valuations. While promoter holding still remains meaningful and there is no pledge, the promoter group has reduced its stake through block deals over the last few quarters. When promoters trim their holding at a time when the stock is already trading at rich valuations, it weakens our conviction at the current price.

(Source - Finology Ticker)

At Finology 30, we prefer buying strong businesses with a reasonable margin of safety. Polycab is a strong company, but at the current valuation, the stock does not offer enough comfort. A lot of future growth already seems priced in, leaving limited room for delays or weaker execution.

That said, we continue to like the long-term opportunity in the wires and cables industry and are tracking the sector closely. We will keep looking for suitable opportunities to invest in this sector.