Polycab shares slipped 2.6% on Friday to Rs 7,130.95 from the previous close of Rs 7,321, ahead of the results. For the December 2025 quarter, Polycab reported a 35% rise in net profit to Rs 620 crore, compared with Rs 460 crore a year earlier. Revenue surged 46% to Rs 7,640 crore from Rs 5,230 crore in the year-ago period, driven by strong volume growth in its core cables and wires business.
Operating EBITDA rose 34.17% year-on-year to Rs 966 crore from Rs 720 crore. However, profitability came under pressure, with EBITDA margin narrowing by more than 100 basis points to 12.66% from 13.8% last year. PAT margin also slipped to 12.70% from 13.80%.
Higher costs weighed on margins. Advertising and sales promotion expenses more than doubled to Rs 91 crore from Rs 37.3 crore a year earlier, while finance costs increased to nearly Rs 69 crore from Rs 50 crore.
Polycab operates 23 manufacturing facilities across India, supported by more than 15 offices and over 25 warehouses, and is the country’s largest manufacturer of wires and cables.
Brokerages stay constructive
Despite margin pressures, most brokerages remain positive on the stock, citing strong volumes, industry tailwinds and Polycab’s execution.
Citi maintained a Buy rating and raised its target price to Rs 9,500 from Rs 9,200. The brokerage said Polycab reported 54% year-on-year growth in cables and wires, “highest since covid period,” led by 40% volume growth. Citi added that Polycab “continues to show solid execution and growth in Cables & Wires business with healthy cash flows and BS,” and noted that the wires and cables industry is seeing “structural tailwinds of strong demand due to infra/power capex, PLI schemes and upcycle in Real Estate.” Polycab, it said, is its “top pick within Consumer Durable/Electrical.”
Morgan Stanley reiterated its Overweight rating and raised its target price to Rs 9,659 from Rs 9,373. The brokerage expects volume growth momentum to continue in the near term, supported by sustained demand across power transmission and distribution, renewables, infrastructure and private capex. It also expects restocking in wires to continue amid inflationary commodity trends and healthy real-estate demand, while a “healthy backlog from non-US geographies” should support export growth.
Jefferies also stayed with a Buy rating, with a target price of Rs 9,225. It highlighted strong volumes of about 40% year-on-year, though it noted that deferred price hikes weighed on margins. Jefferies expects sales and PAT to grow at a CAGR of 22% and 25%, respectively, over FY25-28E, led by volume growth and improving margins in the fast-moving electrical goods segment.
A more cautious view
Goldman Sachs struck a more measured tone, maintaining a Neutral rating while raising its target price to Rs 7,930 from Rs 7,130. The brokerage said Polycab’s 46% revenue growth in the quarter was driven by a 56% jump in the cables and wires segment, aided by higher copper prices. While the company delivered 40% volume growth despite rising commodity costs, Goldman said “margin trajectory remains a key monitorable going ahead as industry supply increases.” The brokerage added that margins in the FMEG segment should improve over time with higher operating leverage and a greater mix of solar products.
Polycab’s December-quarter results reflect strong demand and execution, but also highlight rising cost pressures. With most brokerages reiterating Buy or Overweight ratings and target prices well above current levels, the Street remains broadly optimistic, though margin sustainability is emerging as the key factor investors will watch in the quarters ahead.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)