Copper surge powers Polycab volumes; brokerages bullish despite margin hit

Polycab India share price today: On the bourses, Polycab share price rose up to 3.56 per cent to an intraday high of ₹7,385 per share.

Strong volumes, driven by a surge in domestic demand for cables and wires, powered Polycab India’s December quarter (Q3FY26), even as margins came under pressure due to deferred price hikes amid rising commodity costs. 

 

Brokerages remain largely positive on the stock’s medium-term outlook, betting on sustained private capex, housing and infrastructure demand, market share gains and improving profitability in fast-moving electrical goods (FMEG), though near-term margin volatility remains a key monitorable.

 

On the bourses, Polycab share price rose up to 3.56 per cent to an intraday high of ₹7,385 per share. By 12 noon, Polycab share price was trading 2.87 per cent higher at ₹7,335.50 per share. By comparison, BSE Sensex was trading 0.67 per cent lower at 83,009.06

 

Volumes surge on capex, housing and restocking

 

Polycab delivered its strongest-ever quarterly revenue growth in Q3, with sales rising 46-47 per cent year-on-year (Y-o-Y), led overwhelmingly by its core cables and wires (C&W) business. According to Jefferies, domestic C&W volumes jumped 40 per cent Y-o-Y, supported by healthy momentum in government and private capex, housing demand and channel restocking triggered by a sharp rise in copper prices. Elara Capital and Motilal Oswal shared similar views, noting that wires outperformed cables during the quarter, partly due to inventory stocking by channel partners in anticipation of higher prices.

 

C&W revenues, which formed about 88 per cent of Q3 sales, grew 54 per cent Y-o-Y, aided by both strong underlying demand and copper price pass-through. Jefferies highlighted that growth was broad-based across cables and wires, with institutional cable sales outpacing channel growth, reflecting robust project activity. Exports, however, remained muted, contributing around 6 per cent of revenues versus higher levels in previous quarters.

 

JM Financial noted that Polycab’s Q3 PAT was largely in line with expectations, with revenue strength offset by margin disappointment. Motilal Oswal added that domestic C&W revenues rose nearly 59 per cent Y-o-Y, underlining the company’s widening lead over the second-largest player in the segment.  CATCH STOCK MARKET LIVE UPDATES TODAY 

Margin pressure from deferred price hikes

 

While operating profit margins stayed in the double digits, the quarter saw a clear squeeze. Jefferies pointed out that C&W Ebit margin came in at 12.1 per cent, down 110 basis points (bps) Y-o-Y and 310 bps Q-o-Q. JM Financial pegged Ebitda margin at 12.9 per cent, compared with 15.4 per cent in the previous quarter and 13.8 per cent a year ago.

 

Brokerages broadly agreed on the reasons for the margin dip. Polycab deliberately chose to defer full pass-through of rising raw material costs, particularly copper, to protect demand and preserve market share. Elara Capital and Motilal Oswal estimated that only about 75-80 per cent of the commodity cost increase was passed on during the quarter. Other factors weighing on margins included a lower share of exports, a higher mix of lower-margin institutional sales and elevated advertising and promotion spends, which JM Financial said were nearly three times higher sequentially.

 

Jefferies noted that while price hikes were deferred in Q3, the company has already implemented increases of around 3-4 per cent in January 2026, with further staggered pass-through likely in coming quarters.

 

FMEG turns profitable, capex cycle continues

 

Beyond C&W, brokerages drew comfort from the improving performance of the FMEG segment. Jefferies highlighted that FMEG, which accounted for around 6 per cent of Q3 sales, reported its fourth consecutive quarter of positive Ebit, supported by scale benefits and a favourable product mix, particularly in the solar category. Sales in the segment rose 18 per cent Y-o-Y, despite continued investments in brand building. Elara Capital also flagged FMEG profitability as a key positive underpinning its constructive stance on the stock.

 

On investments, Jefferies expects Polycab to sustain annual capex of ₹1,200-1,500 crore over FY26-28, enabling capacity expansion and future growth. Over FY25-28, it estimates sales and PAT CAGR of 22 per cent and 25 per cent, respectively, with C&W sales seen growing at a 23 per cent CAGR.

 

Valuations, targets and risks

 

Despite a 50 per cent rally since March 2025, Jefferies noted that Polycab trades at around 33x earnings, roughly 5 per cent below its five-year historical average, and retained its ‘Key Pick’ stance with a price target of ₹9,225 based on 35x earnings. Elara Capital reiterated ‘Accumulate’ with a higher target price of ₹8,180, valuing the stock at 33x December FY27 earnings. JM Financial maintained a ‘Buy’ rating with a target of ₹9,200, while Motilal Oswal reiterated ‘Buy’ with a more aggressive target of ₹9,600, valuing the company at 40x FY28 earnings.

 

Brokerages cautioned that sharp volatility in copper prices and any slowdown in demand pose near-term risks. JM Financial also warned that sustained raw material inflation could impact offtake and margins if price hikes are not fully absorbed. 

 

Even so, most analysts believe Polycab’s strategy of prioritising volumes and market share positions it well to capitalise on India’s ongoing capex and electrification cycle.   

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