Pivot to the next phase of expansion

In a significant move, leading Indian manufacturer Polycab has announced plans to invest ₹6,000-8,000 crore in the wires and cables (W&C) segment over the next five years. This investment aims to create additional capacity, primarily in the W&C segment, as the company continues to expand its presence.

Polycab's W&C segment currently accounts for a substantial 84% of its revenues and reported a robust 23% CAGR revenue growth in FY23-25. The segment also contributed a third of its exports to the US market. The company aims to increase its international exports from the current 6% to 10% of its W&C segment revenues.

The FMEG division, which encompasses fans, lighting, solar inverters, switches, and more, has been a significant contributor to Polycab's growth. It accounted for 7% of FY25 revenues and reported a 15% CAGR in FY23-25. The division has recently achieved EBIT-level profitability in the last two quarters and is expected to achieve 8-10% EBITDA margins in the next few years.

The EPC division, on the other hand, accounted for 8% of FY25 revenues and grew at a 108% CAGR in the last two years. It has an ₹8,000-crore order-book for the next three years under Bharat Net and RDSS projects.

Polycab's strong performance is reflected in its financial metrics. The company reported an average EBITDA margin of 13.4% in the last three years and expects to report 11-13% EBITDA margin in the long term. The W&C segment has a high asset turnover of 4-5 times, indicating a continued growth runway.

One notable development is Polycab's plans to set up an EHV cable manufacturing facility to participate in the power infrastructure segment. This move is expected to further boost the company's growth in the W&C segment.

The company's strong financial performance and growth plans have not gone unnoticed. Polycab is currently trading at 39 times one-year forward earnings, which is a 11% premium to its last five-year multiple of 35 times. Despite this, the company is recommended to be accumulated on dips for a margin of safety.

Government capex reached ₹11 lakh crore in FY25 and is expected to sustain growth for the W&C segment of Polycab. This, along with the company's ambitious expansion plans, positions Polycab well for continued growth in the coming years.

Published on August 30, 2025.

This article was published on August 30, 2025, and provides an overview of Polycab's expansion plans and strong performance in Q1FY26. The company's W&C segment, which accounts for the majority of its revenues, is expected to grow further with the company's plans to invest ₹6,000-8,000 crore in the segment over the next five years. The FMEG and EPC divisions have also been key contributors to Polycab's growth, with the FMEG division achieving EBIT-level profitability in the last two quarters. The company's strong financial performance and growth plans have led to a premium valuation, but it is recommended to accumulate the stock on dips for a margin of safety. Government capex is expected to sustain growth for the W&C segment of Polycab, positioning the company well for continued growth in the coming years.