Polycab drops 10% on UltraTech’s Ultravolt entry; Jefferies sees 34% upside
Jefferies retained its Buy call and Rs 11,100 target on Polycab after UltraTech Cement’s Ultravolt cables-and-wires entry triggered a five-day sell-off. The broker cites Polycab’s distribution scale, cable-heavy mix and industry demand-supply gap as competitive buffers.
What happened
Polycab India · Jefferies retained a Buy on Polycab with a Rs 11,100 target after UltraTech’s Ultravolt cables-and-wires entry drove a 10% stock decline. It
Key facts
- Polycab shares fell about 10% in five trading days
- Jefferies target price: Rs 11,100
- Implied upside: about 34%
- Polycab trades at about 35x one-year forward PE
- UltraTech announced Rs 18 billion capex; Rs 9 billion incurred by June 2026
- Cables and wires market value: about Rs 1.01 trillion in FY26
- Polycab C&W market share: 30-31% in FY26 versus 18% in FY20
- Industry growth forecast: 11-12% annually
- Incremental demand FY26-FY30: about Rs 580 billion; supply: about Rs 510 billion
- Polycab PAT CAGR forecast: 22% for FY26-FY29E
- Polycab annual capex forecast: Rs 14-15 billion for FY26-FY29E
Why this matters
UltraTech’s move validates cables and wires as an attractive adjacency, increasing the strategic value of distribution assets, specialist manufacturing capacity and potential partnership or acquisition targets.
What to watch
- Ultravolt's manufacturing capacity, launch geographies, SKU breadth and timeline for national distribution.
- Evidence of UltraTech dealer onboarding, retailer incentives, electrician engagement and bundling with cement or building-material purchases.
- Polycab quarterly volume growth, EBIT margin, trade receivables, inventory and dealer incentive expense.
- Retail-wire pricing trends versus cables, especially any widening discounts or rising promotional intensity.
- Industry capacity additions relative to demand from housing, infrastructure, renewables, transmission and data-center investment.
- Changes in Polycab management guidance, broker earnings estimates and reported market-share commentary.
- Polycab is likely to reinforce dealer and electrician loyalty through targeted incentives, service levels, product launches and brand investment rather than broad price cuts.
- Management may emphasize its cable-led portfolio, manufacturing scale and execution record in investor communication to counter a retail-wire disruption narrative.
- UltraTech is likely to prioritize rapid channel onboarding, regional launches, retailer schemes and cross-selling opportunities with its existing construction-material dealer network.
- Other wire incumbents may increase promotional spending and accelerate capacity, raising the risk of an industry-wide trade-spend cycle.