Polycab Q4FY26: Citi target ₹10,500, demand recovery cues

Polycab rallies after Q4 beat and Citi stays bullish

Polycab India shares jumped 6% on Thursday morning after the wires and cables maker reported a fourth-quarter performance that beat street estimates on most metrics. The stock rose to ₹8,938.70 on the BSE, and also touched an intraday high of ₹8,991, as multiple brokerages revised their target prices upward. Global brokerage Citi set the highest target among the upgrades cited, reiterating a positive view on the company’s execution and scale. The results and commentary mattered because investors are balancing a demand recovery narrative against visible margin pressure.

Citi reiterates Buy, lifts target price to ₹10,500

Citi maintained a Buy rating on Polycab and raised its target price to ₹10,500 from ₹9,500 following the Q4FY26 print. Citi’s note, as cited, argued that Polycab’s execution quality continues to differentiate it in a competitive industry. The brokerage also pointed to market share gains as evidence of sustained strength in the organised segment. Alongside Citi, Motilal Oswal increased its target price to ₹9,800 from ₹9,350, reflecting improved confidence after the quarter.

Q4FY26 results: revenue up 27% but margins under pressure

Polycab reported a 27% year-on-year rise in consolidated revenue in Q4FY26, while EBITDA increased 13% year-on-year. Analysts highlighted that the quarter came despite multiple headwinds, including geopolitical disruptions, a demand slowdown in March, and channel destocking linked to raw material volatility. Even with those conditions, the company delivered growth that surprised the market. However, the slower growth in EBITDA versus revenue reinforced a key investor concern: margin compression.

What drove the softer March quarter

Citi linked the softer March quarter to geopolitical tensions in West Asia, which weighed on domestic demand conditions. The brokerage’s view is that demand is set to recover from that patch, shifting focus to how quickly volumes normalise and whether pricing actions hold. For investors, the near-term question is less about one quarter’s disruption and more about whether the company can defend its growth trajectory while input costs remain volatile.

Volume growth returns in April and May, management says

Management commentary cited in the coverage noted a return to mid- to high-single-digit volume growth in April and May. The comparison was against a strong base in the same period last year, making the trend notable from a demand-read perspective. The market is now watching whether this pace is sustained through the next few months. Volume growth, in this context, is being treated as a cleaner signal than value growth because of frequent commodity-led price changes in the category.

Pricing actions and raw material pass-through

Citi said Polycab passed on the entire impact of raw material costs by the first fortnight of January. The brokerage added that there were no inventory gains due to hedging, a detail investors track because inventory and commodity timing can temporarily inflate margins in this business. Separately, management’s recent price hikes are expected to be a key monitorable. Investors are focused on whether higher realisations can be achieved without hurting demand, especially as competition remains intense.

Market share gains and competitive position

Citi’s thesis leans on Polycab’s scale advantage, while another brokerage highlight in the coverage pointed to a tangible share gain in the organised cables and wires market. Polycab’s share was cited at 30% to 31%, representing an increase of 300 to 400 basis points year-on-year. This matters because organised market share typically improves operating leverage and strengthens pricing power. It also supports the argument that Polycab is capturing growth even when the overall market is choppy.

BharatNet and RDSS: ₹1,800 to ₹2,000 crore revenue by FY27

Polycab is positioning government-led infrastructure programmes as a key revenue driver over the next few years. The company expects BharatNet and the Revamped Distribution Sector Scheme (RDSS) to generate combined revenues of ₹1,800 crore to ₹2,000 crore by the end of FY27. Execution for BharatNet has already started, and management expects ₹1,000 crore of revenue from BharatNet alone. For investors, the focus is now on timely project execution, working capital intensity, and the conversion of these targets into reported numbers.

Capacity expansion: extra-high voltage commissioning and FY28 revenue

Looking beyond FY27, Citi flagged that Polycab’s extra-high voltage capacity is expected to be commissioned by year-end. Citi also indicated that revenue contribution from this capacity is expected to begin in FY28. The brokerage described this as a potential re-rating catalyst that current target prices may not fully capture, although the timing and ramp-up will remain key variables to monitor.

Key numbers at a glance

Market impact and what investors are tracking next

The immediate market impact was visible in the sharp stock reaction and the round of target upgrades after the results. But the next phase of the story is likely to be driven by three monitorables highlighted in the coverage. First is whether recent price hikes can sustain volume growth without dampening demand. Second is execution pace in BharatNet and RDSS, which will determine whether the ₹1,800 to ₹2,000 crore FY27 revenue target is achieved. Third is the direction of margins, since investors want evidence of stabilisation after the pressure seen alongside strong top-line growth.

Why this matters: growth quality versus margin durability

Polycab’s quarter reinforced that revenue growth can remain strong even amid geopolitical disruptions and domestic demand volatility. At the same time, the gap between revenue growth and EBITDA growth shows why cost control and pricing discipline are central to the investment debate. Citi’s bullish view leans on execution, market share gains, and project-driven demand, while investors will look for confirmation in subsequent quarters. The next updates on price realisation, project billing, and margin trajectory are likely to shape how the market values the company from here.