Multibagger stock: Polycab shares rise 5% as Jefferies sees more upside

Shares of Polycab India closed nearly 5% higher on Monday as global brokerage Jefferies has projected a significant upside for the FMEG player., estimating a potential 19% increase in shares, setting a new target price of ₹7,150. This forecast comes as the brokerage firm maintains its "buy" recommendation on the stock.

Polycab has achieved a market share increase in the organised cables and wires segment, reaching 26%-27% in FY25, up from 18% in 2020, aided by a ₹2,800 crore capex over four years. The FMEG segment, which contributes 10% to sales, has turned profitable after ten quarters, further boosting investor confidence.

The FMEG stock closed 4.85% higher at Rs 6291.05 on Monday against the previous close of Rs 6000. The stock zoomed 202% in the last three years.

Total 0.43 lakh shares of the firm changed hands amounting to a turnover of Rs 26.62 crore on BSE. Market cap of the firm stood at Rs 94,662 crore in the current session.  

Polycab India has a one-year beta of 1.12, indicating high volatility during the period. Polycab India shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages. The FMEG stock is neither overbought nor oversold on charts, indicates its RSI at 52.1.

Jefferies highlights the cable and wire business's robust performance, with a Compounded Annual Growth Rate (CAGR) of 26% in sales. The brokerage anticipates the FY25-28 earnings-per-share CAGR to exceed 26%, driven by a strong order book and improved FMEG margins. Despite a 25% increase from March 2025, Polycab trades at 34 times its FY26 earnings estimates, slightly above its five-year average. Jefferies stated, "In view of the strong order book in cables and wires (especially Bharat Net), we raise the FY27-28 earnings-per-share estimate by 2.4%, retain price-to-earnings ratio at 33x, in-line with historical five-year average." This aligns with the expectations for a continued upward trajectory in Polycab's market performance.

The company plans a capex of ₹6,000 crore to ₹8,000 crore, and aims for exports to contribute over 10% of sales, with an anticipated dividend payout ratio exceeding 30%. Despite the risks posed by potential slowdowns in housing and private capex, Jefferies sees no immediate threat to Polycab's financial performance.

Polycab India Limited is the country's largest manufacturer of wires and cables. The company's business operations span across India through 23 manufacturing facilities, 15 plus offices and 25 plus warehouses.