J.P. Morgan has initiated coverage on Polycab India, assigning an Overweight rating and projecting a 16% upside from current levels, citing strong near-term growth prospects driven by India’s electrification and energy transition push.
In its sector initiation note on cables and wires (C&W), JPMorgan described the segment as a key beneficiary of structural trends such as power grid expansion, renewable energy integration, and rising electricity demand, positioning large, organized players like Polycab as “picks and shovels” to the electrification theme.
Strong near-term growth outlook
JPMorgan expects Polycab to deliver higher near-term growth compared to peers, supported by its scale, wide product portfolio, and strong presence across cables and wires. The brokerage noted that rising copper prices could lead to near-term earnings upgrades, with FY27 earnings for the sector estimated to be 8–12% above consensus.
Polycab’s diversified exposure and leadership position in the organized market are expected to support volume growth as electrification-related capex accelerates across power, infrastructure, and industrial segments.
Margin normalization risks flagged
However, JPMorgan flagged potential margin pressure over the medium term. The brokerage pointed out that Polycab currently enjoys an EBIT margin advantage of around 450 basis points over the top five peers, despite having a higher share of cables in its mix.
According to the report, this margin superiority could normalize as competition intensifies, particularly with the expected entry of large conglomerates into the higher-margin, organized wires segment. JPMorgan also noted that Polycab’s planned capex cycle to maintain capacity leadership in cables could weigh on returns in the near term.
Valuation and risk-reward
JPMorgan highlighted that Polycab is currently trading at around a 10% valuation discount to KEI Industries, which it believes balances the risks from rising competition and margin normalization. As a result, the brokerage said the risk-reward profile for Polycab remains attractive, even as competitive intensity increases across the sector.
While JPMorgan structurally prefers KEI Industries for its cleaner exposure to cables, higher export mix, and potential margin improvement, it maintained an Overweight stance on Polycab, citing strong growth visibility and its positioning as a key beneficiary of India’s ongoing electrification cycle.