The Front Wave view
The compounding engine held. The valuation has now caught up.
When Front Wave initiated coverage in May 2025 at ₹6,103, the thesis rested on four pillars: an underappreciated cables franchise, an FMEG segment about to inflect, a self-funding balance sheet, and a multi-year capex cycle. All four delivered across twelve months and four updates. The stock has appreciated 47%. Five of seven management guidance metrics moved upward. FMEG turned profitable for the first time in five years. Market share gained 300–400 basis points.
In Q4 FY26, Polycab delivered its highest-ever quarterly revenue (₹8,865 Cr, +27% YoY), with FY26 closing at ₹28,884 crore revenue (+29% YoY) and ₹2,708 crore PAT (+32% YoY). The W&C segment is running ahead of the Project Spring 11–13% EBITDA target band, with FY26 W&C EBIT margin at 13.6%. At 22.7× FY28E EV/EBITDA, the stock now trades slightly above our base-case 22× multiple.
Why HOLD, not sell. This is not a top call or a warning of deteriorating fundamentals. Polycab remains India's best cables franchise, with net cash, 32.5% RoCE, 24.8% RoE, and an EBITDA margin trajectory pointing toward 14.4% by FY29E. The quality is unchanged. What changed is the relationship between price and value.
At ₹9,003, the stock prices the 22× FY28E EV/EBITDA base case. A modest bull case (24×) implies 5.6% upside. A modest bear case (18×) implies −20% downside. The asymmetry favors neither fresh buyers nor sellers. Existing holders should sit tight. New positions should await a setback.
| Change in Q4 FY26 | Metric | Value |
|---|---|---|
| ▲ Ahead | W&C margin | 13.6% FY26 EBIT (vs 11–13% target) |
| ▲ +54% | Capex spend | ₹1,480 Cr (vs ₹958 Cr FY25) |
| ▲ Widened | Volume growth multiplier | 1.5–2× real GDP |
| ▲ +300–400 bps | Market share (W&C) | 30–31% (from 26–27%) |
| ▲ Rising | Dividend payout | 27.2% in FY26 (target 30%+ by FY30) |
| ▼ Timeline slip | FMEG 10% revenue mix | Revised to 8–10% by FY30 (from FY26) |
| ▼ Timeline slip | Exports 10% revenue mix | Pushed to >10% by FY30; FY26 actual 5.4% |
Q4 FY26 print
Highest-ever quarter, across almost every line.
Revenue of ₹8,865 crore was a record, +27% YoY. EBITDA of ₹1,161 crore at 13.1% margin grew 13% YoY (declining 160 bps from a high Q4 FY25 base). PAT of ₹786 crore grew 7% YoY at 8.9% margin.
The W&C segment alone delivered ₹7,674 crore in Q4 revenue (+30% YoY) at a 13.1% EBIT margin — ahead of the Project Spring 11–13% band. FMEG grew 47% YoY for the quarter and turned EBIT-positive at 4.1% Q4 margin. EPC declined 15% YoY on project-cycle timing.
| Metric | Q4FY25 | Q3FY26 | Q4FY26 | YoY % | QoQ % | FY26 | FY25 | YoY % |
|---|---|---|---|---|---|---|---|---|
| Revenue | 6,985 | 7,636 | 8,865 | +26.9% | +16.1% | 28,884 | 22,408 | +28.9% |
| Wires & cables | 5,920 | 6,741 | 7,674 | +29.6% | +13.8% | 25,179 | 18,888 | +33.3% |
| FMEG | 469 | 487 | 692 | +47.4% | +42.0% | 2,069 | 1,654 | +25.1% |
| EPC | 603 | 407 | 510 | −15.4% | +25.3% | 1,667 | 1,919 | −13.2% |
| EBITDA | 1,025 | 966 | 1,161 | +13.3% | +20.2% | 4,006 | 2,960 | +35.3% |
| EBITDA margin % | 14.7% | 12.7% | 13.1% | −160 bps | +40 bps | 13.9% | 13.2% | +65 bps |
| PAT | 734 | 630 | 786 | +7.0% | +24.7% | 2,708 | 2,046 | +32.4% |
| PAT margin % | 10.5% | 8.3% | 8.9% | −165 bps | +60 bps | 9.4% | 9.1% | +25 bps |
| EPS (₹) | 48.3 | 41.3 | 52.2 | +8.0% | +26.3% | 177.5 | 134.3 | +32.1% |
