Polycab: Largest electrical player in revenues in India

Polycab released its FY 25 results on May 6, 2025, with revenues exceeding INR220bn, while achieving its highest ever profitability. Revenue surged 24% y/y to INR224.1bn, projecting the company as the largest player in the electrical industry in terms of revenue. EBITDA rose 19% to INR29.6bn, with margins contracting by 60bp to 13.2%. At the bottom line net income increased of 13% to a record INR20.5bn.

Polycab India Limited is a leading Indian manufacturer of Wires and Cables with a dominant market share of 26%. In addition, the company is one of the fastest growing FMEG companies catering to various product categories including Fans, Switches, Water Heaters, Switchgears, Luminaires, Solar Panels, Conduits and Accessories, and Home Automation solutions.

The company manufactures its products in 28 advanced manufacturing plants located across key regions in India. The Wires and Cables (W&C) segment contributed the lion's share of revenues (88%) in FY 24, followed by Fast Moving Electrical Goods (FMEG) at 7%, and Engineering, Procurement, and Construction (EPC) at 5%.

W&C business leading growth

Polycab is powering India’s development with the company’s products finding applications in high-value projects including Bengaluru Metro, Godrej Panvel City and JW Marriot Hotel. In addition, the group provides critical support for utility and energy and power sectors. Amidst sustained demand, the W&C segment, mainstay business of the company, rose 18% y/y to INR188.9bn in FY 25, driven by improved project execution, increased government spending, and sustained demand in the real estate sector. The domestic W&C business posted a decent 20% growth, fortifying Polycab’s market share gains.

The international business contributed towards 6% of revenues in FY 25, with the company expanding its presence to 84 countries. However, the segment declined 24% y/y in Q4 25, owing to the rollover of a large order into the next quarter. A strong rebound is therefore anticipated in FY 26, complemented by a robust order book and a favorable demand environment across key markets.

The FMEG business surged 29% to INR16.5bn in FY 25, supported by outperformance from solar products, posting around 2.5x increase over the year. In addition, the FMEG business delivered a turnaround performance in Q4 25, its first profitable quarter following ten successive quarters of strategic investments in talent, product innovation and brand building.

Macro tailwinds

Polycab enjoys a leading position in the Indian electrical market landscape, supported by innovative R&D capabilities, high degree of backward integration and a strong pan-India network. The company forecasts India’s infrastructure spending to surge to INR143tn between 2024 and 2030, more than double of INR67tn expensed between 2017 and 2023. This augurs well for the W&C sector and signals an opportunity for further market share gains for Polycab.

In addition, the company is also looking to expand its FMEG business with an extensive portfolio comprising over 6,000 SKUs. Polycab anticipates the TAM of the Indian FMEG industry to reach over INR1.2tn by 2030, signaling robust opportunities for the company.

Long term increase in market share

Polycab has reported robust performance over FY 19-25 with impressive growth across key metrics. Revenue rose at a CAGR of 19% to INR224bn in FY 25. At the same time, its International Business expanded at a CAGR of 33% to INR13.5bn. EBITDA increased at a CAGR of 20.4% to reach INR29.6bn in FY 25, with margins expanding by 128bp to 13.2%. In addition, market share of the domestic organized W&C business increased from 18% in FY 19 to 26-27% in FY 25, reflecting the quality and demand of the product portfolio.

The company enjoys a positive net cash position, which soared 55x over FY 19-25 to reach INR24.6bn from INR0.45bn. Encouraged by the positive performance, its dividend per share also jumped from INR3 in FY 19 to INR35 in FY 25.

In comparison, Havells India, a local peer, posted a revenue CAGR of 13.7% over FY 19-25, reaching INR218bn. EBITDA increased at a CAGR of 9.6% to INR20.5m in FY 25, with margins contracting by 229bp to 9.4%.

Attractive valuation compared to peer

Over the past 12 months, the company's stock has reported muted performance, falling approximately 9.4%. In comparison, Havells India’s stock fell more, down 15%.

Polycab is currently trading at a P/E of 37.7x, which is lower than Havells India’s valuation of 54x. The company is trading slightly below its 3-year historical average of 38.4x.

Likewise, the company is currently trading at an EV/EBITDA multiple of 25.8x, which is lower than its 3-year historical average of 26.1x and that of Havells India (36.6x).

Polycab is monitored by 29 analysts, who are generally positive; 23 have ‘Buy’ ratings and three have ‘Hold’ ratings for an average target price of INR6,772, implying 13.8% upside potential from the current price. Their views are further supported by an anticipated EBITDA CAGR of 16.3% over FY 25-28, reaching INR46.6bn, with margins of 12.9% in FY 28. In addition, analysts estimate a net profit CAGR of 17.2%, reaching INR32.6bn with margins of 9% in FY 28, with EPS expected to increase to INR215.2 in FY 28 from INR133.8 in FY 25. Likewise, analysts estimate EBITDA CAGR of 18.2% and net profit CAGR of 18.7% for Havells India.

Overall, the company appears to be set to post growth over the long term, supported by a positive fundamental trajectory, gains in market share, and a strong balance sheet. However, Polycab is prone to a few risks, including technological lag, stiff competition, inflation of raw materials, and low demand in client industries.