Polycab India, the country’s largest cables and wires manufacturer, saw its stock rise 3.5% on March 5, 2025, reaching ₹5,078 per share. The gains came after Morgan Stanley reiterated its bullish stance, setting a price target of ₹7,395, implying a 52% upside. Despite recent volatility triggered by UltraTech’s market entry, analysts foresee continued strength in the cables and wires sector, with demand and export growth supporting Polycab’s outlook.
Polycab India, the country’s leading cables and wires manufacturer, witnessed a 3.5% rise in its stock price, reaching ₹5,078 per share. The surge follows a bullish outlook from global brokerage firm Morgan Stanley, which reaffirmed its ‘Overweight’ rating on the stock with a target price of ₹7,395, indicating a 52% upside.
Morgan Stanley’s report highlighted the strong demand in the cables and wires (C&W) segment, coupled with promising export growth. The firm also emphasized that UltraTech’s recent entry into the sector is unlikely to pose a major industry challenge in the near term.
Market Sentiment and Analyst Views
The brokerage noted that rising import tariffs imposed by the U.S. on competing countries could further benefit Indian C&W manufacturers, including Polycab. Additionally, fluctuations in copper prices, driven by inflation, are expected to support higher realizations for the company in Q4 FY25.
Despite concerns over UltraTech’s entry into the segment, analysts believe its expansion will take years due to long gestation periods in scaling the cable business. Wires, which have a shorter approval process, still require strong industry relationships for widespread adoption.
Polycab’s Growth and Industry Outlook
With an ₹18 billion investment, Polycab accounts for 10% of the current C&W industry and 3-4% of the projected sector size in FY31. The company’s earnings before interest and tax (EBIT) margins are expected to remain in the 12-14% range in the near term, stabilizing between 11-13% over time.
Jefferies also maintained a ‘Buy’ rating on Polycab, although it lowered its price target to ₹6,485, citing increased competition beyond 2027.
Stock Performance and Recent Setback
Despite its recent rally, Polycab’s stock has experienced sharp volatility. On February 27, 2025, shares plunged 19%—the biggest single-day decline in 13 months—after UltraTech announced its expansion into the cables and wires market. The stock ended February with a 22% loss, marking its third consecutive month of declines.
From its peak of ₹7,595 in December 2024, Polycab shares have dropped 33%. However, long-term performance remains strong, with gains of 124% over three years and 400% over five years.
Industry Growth Drivers
The cables and wires industry has seen rapid growth due to government-led infrastructure projects, increasing electrification in rural areas, and growing nuclear family trends. Additionally, the rise in cable and wire exports has further fueled the industry’s expansion.
With robust demand and positive analyst outlooks, Polycab India remains a key player in the evolving electrical infrastructure sector. Investors will closely watch how the company navigates competition while capitalizing on emerging opportunities.
