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Polycab India Ltd could well deliver around 25% revenue growth for the third year in a row in FY26. Consolidated revenue increased 21% year-over-year for the half-year ended September (H1FY26), and a pickup is anticipated hereon, which is expected to boost growth rates in H2.

Polycab put up a stellar show in Q2FY26. Consolidated Ebitda beat analysts’ estimates, jumping 62% year-on-year to ₹1,021 crore, even as revenue growth was much slower at 18% to ₹6,500 crore.

Ebitda performance was driven by strong demand across both domestic and export markets, and a better product mix in its key segment, wires & cables (W&C), which contributed 87% of Q2 revenue and increased by 21%. W&C earnings before interest and taxes (Ebit) expanded 270 basis points (bps) to 15.1%, aided by a higher share of premium wires.

Exports grew faster at 25% despite the tariff-led uncertainties in the US market, which formed 20% of total exports.

While Polycab faced pressure due to an increase in copper prices, it managed to pass on the same, leveraging its market position with a 27% share in the organized sector, and due to lower competitive intensity.

“We believe that the company’s consistent market share gains in the domestic segment reflect its robust execution and strong channel relationships," noted ICICI Securities in a 19 October report. Polycab would also enhance its product portfolio with the commissioning of its facility to manufacture cables for extra high voltage expected in early FY28.

Meanwhile, the project-driven EPC (engineering, procurement & construction) segment, contributing 6% of total revenues, declined 19% on Q2FY25’s high base when growth was over 200%.

However, the outlook is better with a pickup in execution for two of its key projects, which have an unexecuted order backlog of over ₹11,000 crore.

“The decline in the EPC business was due to the project execution cycle, while the order book remains healthy and the hope is that of a stronger H2," said analysts at JM Financial Institutional Securities.

Polycab’s FMEG (fast moving electrical goods) segment revenue was up 14% in Q2FY26, but it faces margin pressure. The segment is highly competitive. Polycab has reported negative Ebit margin for the past two years.

An industry-wide price hike taken in fans helped Polycab turn Ebit positive last quarter, although marginal at 0.5%, against -6.5% last year. Considering the market dynamics, Polycab’s target of achieving 8-10% Ebitda margin for the segment by FY30 under its project Spring, looks a tough ask.

A strategic divestment of fans & lighting portfolio, while increasing focus on solar products could help the company improve its returns profile.

Polycab’s shares hit a new 52-week high of ₹7,794.50 apiece earlier this month, up about 67% from its 52-week low in February. The stock trades at 43.5 times FY26 estimated earnings, as per Bloomberg.

Continued strong growth momentum led by government and private sector demand, and receding fears of higher competitive intensity in the W&C segment due to entry of new players have helped improve sentiments.

ICICI Securities projects Polycab to report net profit growth of 24% CAGR over FY25-28, with return on capital employed (RoCE) at above 20%. Polycab also got a relief from a favourable order by the Commissioner of Income Tax (Appeals) in August, against an income tax demand, following a raid on the company’s premises in December 2023. Amid upbeat prospects, Polycab’s investors must track the impact of fluctuation in input prices and the entry of new players in the market.

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