The wire and cable sector stocks are in focus. The share price of Polycab has declined by over 13% in the last 5 days. There are concerns that the March quarter could see softer volumes due to geopolitical disruptions across West Asia and a high base.
However, the company continues to gain market share and remains optimistic about long-term demand in the cables and wires sector. Domestic brokerage house JM Financial retained a ‘Buy’ rating on Polycab India. They have set a target price of Rs 9,000, implying about 23% upside from the current levels.
Here is a detailed look at JM Financial’s investment rationale for Polycab.
March disruptions may weaken fourth-quarter volumes
JM Financial expects the March quarter to be relatively weak compared with earlier expectations. The brokerage said business activity during January and February 2026 remained broadly normal, though January saw some overstocking while February witnessed destocking across the channel. However, March has been weaker so far due to uncertainty related to ongoing Middle East conflicts and a high base, which could affect fourth-quarter estimates.
The March quarter is typically the strongest for cables and wires companies, with March alone contributing about 45–50% of quarterly volumes, the report noted.
If the current uncertainty persists, fourth-quarter volumes could remain flat year-on-year, with revenue growth largely supported by higher input prices.
Price hikes offset input costs, but margins face pressure
Polycab has already passed on the higher raw material costs through price hikes implemented in December 2025 and January 2026.
However, JM Financial anticipates that margins may still face pressure due to two factors, which include negative operating leverage caused by softer volume growth and potential disruptions in exports, which are typically a higher-margin business.
As a result, the cables and wires segment’s EBITDA margin in the March quarter may stay near the upper end of the company’s guided range of 12–14%, but about 240 basis points lower year-on-year, according to JM Financial.
Export shipments affected by geopolitical tensions
Exports account for around 6% of Polycab’s revenue, with roughly 20% of these linked to the Middle East, the report said.
According to the report, the ongoing geopolitical tensions in the region have led to logistical disruptions, including vessel freight rates rising four to five times and restrictions on port operations such as berthing and refuelling. The report further explained that this affected export shipments and added to the uncertainty during March.
However, the brokerage noted that export weakness is largely due to logistical constraints rather than order cancellations, indicating underlying demand remains intact.
Long-term demand outlook remains strong
Despite the near-term slowdown, JM Financial said the company remains confident about structural growth in the cables and wires market.
Polycab expects to grow 1.5 times faster than the industry, which itself is projected to expand at roughly twice India’s real GDP growth, the brokerage noted.
Demand is expected to be supported by infrastructure development, electrification initiatives, rising industrial capital expenditure and new data centre capacity additions. The report further added that the company is also expanding its distribution network and deepening its presence in tier-3 markets, which could support future growth.
Conclusion
JM Financial is positive over the long-term, though they anticipate some short-term challenges. The brokerage house has slightly lowered its earnings estimates for Polycab for FY26 -FY28 by 2% due to near-term disruptions. Despite the revision, the brokerage has maintained its ‘Buy’ rating on the stock.
Disclaimer: This article provides factual analysis only and is not, and should not be constructed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their indepedent due diligence and seek advice from a SEBI-registered financial advisor.