Shares of Polycab India jumped over 7% on Thursday, also hitting a 52-week high of ₹8,991.50 despite 160 basis points year-on-year drop in its March quarter (Q4FY26) Ebitda margin to 13.1%.
While a sharp increase in input prices and higher logistics costs hurt margin, price hikes taken last quarter helped Polycab beat analysts’ estimates. Plus, the company’s market share improved by four percentage points in FY26 to about 30-31%, which should benefit Polycab as demand stabilizes.
Despite the near-term disruption, the domestic demand outlook remains strong, primarily led by the power sector. Transmission line execution is expected to grow to 21,000-22,000 circuit kilometres (ckm) annually, against about 15,000 ckm over the last five years, the management said in the earnings call. Also, Polycab would add another lever to its revenue with the commissioning of its extra high voltage (EHV) cables plant by end-2026, being built at an investment of about ₹700 crore. Half of the current demand for EHV cables is met through imports.
The company invested ₹1,500 crore in FY26, and plans to invest about ₹1,200-1,500 crore annually over the next five years. “Polycab continues to invest in capacities far ahead of time, and will be a key beneficiary of sustained demand uptick as a market leader with largest capacity, robust capabilities and fastest execution,” noted Centrum Broking.
Polycab is also focusing in a big way on the export market, primarily the US, which contributed about 40% of its exports, and re-established its distribution network over the last three-four months. While West Asia saw a hit in Q4, demand is expected to recover strongly, driven by reconstruction needs. The company targets to take its export share to 10% by FY30, as per its Project Spring plan, currently at 4.4%.
In Q4FY26, consolidated revenue grew by 27% to ₹8,864 crore, similar to the growth of 30% for 9MFY26. However, higher institutional sales, where the margins are 3-4 percentage points lower, to make up for cautious distributors’ purchases, led to modest 13% growth in Ebitda to ₹1,162 crore, a sharp contrast from 47% growth for 9MFY26.
Polycab’s shares have gained by 34% from their early April lows, after declining 22% since the beginning of the West Asia war. The stock trades at about 43 times FY27 estimates EPS, as per Bloomberg consensus. Margin recovery with sustained revenue growth would be critical for the stock.