8x stock surge, record Q1 FY26 revenue: Can Polycab sustain the momentum?
Five years ago, the well-run cables and wires company was trading in the sub-Rs800 range. It was steady, predictable, and hardly the sort of stock that was a part of conversations.
Today, that same company trades close to Rs 7,000.
That is an eight-fold return for anyone who stayed the course. And it has not been a straight line climb. There were pauses, pullbacks, and even a sharp fall in late 2024. Yet, the stock's swift recovery in 2025 says a lot about the conviction investors have built in its story.
Polycab has earned its re-rating the hard way by cementing its leadership in wires and cables, pushing aggressively into fast-moving electrical goods, and expanding margins without losing sight of operational discipline.
It has kept its balance sheet strong, sitting on over Rs 3,100 crore of net cash, and it continues to invest heavily in growth under its multi-year Project Spring plan.
In Q1 FY26, Polycab delivered the highest-ever first-quarter revenue and profit in its history, showing strength across segments and geographies.
For investors, the question now is whether the next phase can match or even exceed the voltage of its past run.
Polycab runs two main businesses: the wires & cables segment, which is the engine room of the company, and the Fast Moving Electrical Goods (FMEG) segment, which is its growth frontier. There is also a smaller Engineering, Procurement & Construction (EPC) arm that helps it deliver turnkey electrification projects.
In Q1 FY26, the company reported Rs 5,906 crore in revenue, up 26% year-on-year. The wires & cables division alone brought in around Rs 5,130 crore or about 87% of total sales, growing a strong 31% YoY.
This is where Polycab's dominance shows.
It sells everything from the copper wiring inside homes to the heavy-duty cables used in power plants, railways, and telecom projects. The domestic cables business grew faster than the market, hinting at market share gains.
Exports are still a small slice of the business at 5.2% of revenue, but they grew 24% year-on-year in the latest quarter. Management sees the US as a significant long-term opportunity because Indian cables currently benefit from lower import duties there than Chinese cables (about 10% versus 55%).
However, the domestic duty environment has become less predictable, with recent hikes making exports from India more cost-sensitive. This uncertainty means that while the US tariff gap is a strategic tailwind, sustaining export momentum will require close attention to shifting trade policies.
For the FMEG business, premium products are leading the way. For instance, premium fans now contribute 25% of fan sales, premium lights make up over 35% of lighting sales, and new modular switches already account for 20% of switch sales. Even solar inverters have emerged as the single largest category in the FMEG portfolio this quarter, driven by the state-level rooftop solar push.
Also, one of the big pluses is that the margins have been expanding across the board.
Consolidated Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margin rose to 14.5%, up from 12.4% a year ago. The wires & cables segment delivered a 14.7% EBIT margin, and FMEG's profitability has started to take shape. A big help has been a better sales mix (more high-margin products) and operating leverage from higher volumes.
One of Polycab's underrated strengths is its distribution muscle.
It works with over 4,300 authorised dealers and reaches 2 lakh+ retail outlets across India. This network not only moves products efficiently but also allows Polycab to launch and scale new categories faster than many rivals. The same trucks that drop electrical cables to a distributor can also deliver fans, switches, and solar inverters, creating cost efficiencies and increasing shelf space presence.
The company has also kept its working capital cycle lean.
In Q1, it was just 43 days, helped by efficient collections and inventory management. Sitting on Rs 3,100+ crore of net cash, Polycab can fund expansion from internal resources without taking on heavy debt, a big advantage when scaling both manufacturing and distribution.
Polycab's stock has climbed nearly 8x in five years, and at the current price of around Rs 7,000, the company commands a market capitalisation of over Rs 1 lakh crore.
On a trailing basis, the stock trades at roughly 45 times earnings, which is a premium to many industrial peers but in line with high-quality consumer electrical names. The market is pricing in sustained double-digit revenue growth and margin stability.
The optimism is perhaps not without basis.
The domestic wires and cables market is expected to grow at a mid-teens CAGR over the next five years, powered by infrastructure spending, housing demand, and the shift to premium, branded products.
On top of that, Polycab's export push has a structural advantage due to favourable US tariffs, while its FMEG business offers a consumer-brand rerating opportunity if it continues to expand margins and scale.
Management is also guiding for steady capex under Project Spring, targeting both capacity expansion and deeper penetration in Tier-2 and Tier-3 cities. With over Rs 3,100 crore of net cash and a lean balance sheet, this growth can be funded internally without putting pressure on returns.
Still, investors should be aware of the risks.
A slowdown in infrastructure or real estate activity could hit cable demand. Raw material price swings, especially in copper and aluminium, can squeeze margins if not passed on quickly. Competition in FMEG is fierce, with established consumer brands fighting for the same shelf space. And on the export side, tariff advantages are policy-driven and could change with trade negotiations.
That said, Polycab's track record of execution, market share gains, and balance sheet strength put it in a position to navigate these challenges better than most. If the company can maintain high-teens revenue growth and keep margins in the 13-15% range, the stock's premium multiple may hold.
For long-term investors, Polycab remains an interesting mix of a steady infrastructure play with a consumer brand growth kicker. The next few years will show whether this current keeps flowing at the same intensity.
Note: This article relies on data from annual and industry reports. We have used our assumptions for forecasting.
Parth Parikh has over a decade of experience in finance and research and currently heads the growth and content vertical at Finsire. He holds an FRM Charter and an MBA in Finance from Narsee Monjee Institute of Management Studies.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
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