This cable and wires stock has fallen about 20% from its peak but the global investment bank Jefferies has a ‘Buy’ on this stock even as a new rival, Ultravolt, entered the market. Jefferies in its report noted that Polycab, the cable and wire stock in consideration, now trades at about 35 times its expected earnings for the next year. It is around 8% below the company’s five-year average.

Jefferies titled its note “Another Quarter, Another Beat.” In the September 2026 quarter, cables and wires sales rose 47% from a year ago. Domestic sales grew 50%. Exports grew 17%.

Volume growth stayed in single digits. The report added, “Rest growth was pricing-led.” Copper prices were up 43% year-on-year, and Polycab passed that cost on to buyers.

Fast-moving electrical goods, or FMEG, did the surprising work. Solar products drove sales to more than double. Earnings before interest and tax, a simple measure of operating profit, reached about 10% of sales. A year ago it was near 1%.

Cables and wires saw a dip. Their margin fell to 14.2%, down 0.9 percentage points, because last year’s base was high. The engineering, procurement and construction business is only about 4% of sales. Its sales rose 53%, but its margin slipped.

The launch of UltraVolt by UltraTech Cement has raised questions about competition in the cables and wires market. The share price of the company has fallen around 20% from its June peak amid these concerns.

However, Jefferies believes the threat may be manageable. According to the report, the new entrant’s planned capital expenditure of Rs 1,800 crore and expected asset turnover could translate into a 5-6% share of the cables and wires industry’s sales by FY29-30.

Jefferies also noted that the informal market accounts for around 25% of the industry, leaving room for organised players to expand. It added that Polycab’s product mix is weighted towards cables, while the new entrant appears more focused on wires.

Still, competition remains a risk. The industry’s net profit margins of 5-7% leave limited room for aggressive price cuts without affecting profitability.

Jefferies has broadly retained its estimates and price target, using a target price-to-earnings multiple of 37 times, compared with the company’s historical five-year average of 41 times.

The global investment bank has given a ‘Buy’ rating to the stock with target price set at Rs 11,040. This translates to an upside potential of 33% from the current market price.

Jefferies noted, “Over FY26-FY29, we estimate PAT CAGR of +22%, led by volume growth and FMEG margin improvement.”

The brokerage also expects the company to continue investing around Rs 1,500 crore annually over this period. Its expansion into extra-high-voltage cables and supplies to data centres could provide additional growth opportunities.