Polycab shares slide 17% in 3 months amid Ultravolt shock, but Jefferies sees 33% upside. What’s behind the bullish view?

Wires and cable stocks recently saw a sharp downturn after UltraTech entered the segment, with Polycab being one of the top losers and falling 17% from its June peak, but Jefferies remains bullish on the stock and sees 33% upside potential.

The international brokerage hosted Polycab’s management at the Jefferies India Forum 2026, following which it maintained its ‘Buy’ call and a target price of Rs 11,100 apiece, implying around 33% upside potential from the stock’s previous closing price of Rs 8,369.50 apiece.

Jefferies, in its note, highlighted that the cables and wires market is estimated to grow at 11-12% CAGR, while Polycab targets outperforming the overall market by 1.5 times, aided by a focus on new areas, products, customers, and growing wallet share with customers. Power is estimated to account for 40-45% of the company’s cables and wires demand, with power generation, renewable energy, and T&D network being the key drivers.

Despite the recent sharp surge in copper prices, Polycab is not yet witnessing any major demand disruption due to price hikes. Copper prices have jumped more than 43% YoY in Q2 FY27 so far. Demand from verticals like power, mobility, industry, infra and emerging spaces is growing at a healthy pace. The housing market remains healthy. Wires account for 70% of demand in this sector, the international brokerage noted. It estimates the company to post more than 20% sales CAGR over FY27-29.

Also read | Wires & cables face a new challenge: How Ultravolt’s big push could reshape India’s cable market

Polycab retains double-digit volume growth guidance

Polycab has retained double-digit volume growth guidance for most quarters in the next two to three years, Jefferies said, adding that the over 18% YoY volume growth in FY26 was higher than most peers. While underlying demand trends in the cables and wires market stay strong, the Q2-Q3 FY26 volume base of LY appears high, the international brokerage noted.
“Also, while copper volatility is passed on, it may impact channel stocking in the near-term. Generally, channel stocks up on inventory at the end of every quarter depending on the price outlook for the next few months. We factor cables and wires sales growth to moderate over FY26-29,” it added.Meanwhile, in the paints industry, while it is easier to launch SKUs and ancillary products to expand sales, this model is not similar to cables and wires, especially the former, Jefferies said. It added that the lower operating margin in cables and wires is not sustainable in the long term, and competition may be unable to undercut prices for long.

“Polycab has a higher share of cables than wires in its sales mix. Wires require minimal certification and have lower barriers to entry. Whereas cables, especially EHV, special applications, etc., require certifications for usage and durability, which have longer gestation periods. LV & MV cables require other standard certifications,” Jefferies said, adding that scale and distribution are key moats for Polycab.

The company has the capability to track and fulfil inventory of dealers within a day’s time, giving an edge over competition, and its 11-13% cables and wires operating margin guidance factors in all sensitivities, including competition, Jefferies said.

The international brokerage estimates the company to post FY26-29 PAT CAGR of over 22%, led by volume growth and firming FMEG margin. It retained its capex estimate at Rs 14-15 billion per annum over FY26-29. Amid the Ultravolt launch, Jefferies noted that Polycab is down 17% from the June peak, now trading at 35x one-year forward PE, which is 7% below its historical five-year average. However, key risks to Jefferies’ estimates include higher competition, demand slowdown and sharp copper volatility.

Also read | Wires on fire: Why UltraTech’s Rs 1,800 crore Ultravolt bet wiped out Rs 21,500 crore in 2 days

Polycab share price

Polycab shares have fallen around 7% in a month. The stock saw the sharpest market value erosion earlier this month after UltraTech entered into the wires and cables business. The stock has gained 3% in a week and 9% so far in 2026.

In the longer term, the stock delivered 63% returns over three years and more than 248% in five years.

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.