Polycab India is a three-segment electrical franchise whose core wires and cables business has been compounding revenue ahead of the market and earning margins above its own 11-13% medium-to-long-term guidance. The Q2 FY27 result reinforced that picture: consolidated revenue grew 53% year on year, EBITDA rose 39% to a 14.4% margin, and PAT reached INR 9,900 million at a 10.0% margin. H1 revenue crossed INR 180 billion, up 46%, with EBITDA margin at 14.1% and PAT margin at 9.9%. The balance sheet carried INR 45.2 billion of net cash at 30 September 2026. These are reported results, not annualized guidance.
The economic engine is the Wires & Cables segment, which contributed the bulk of group revenue and profit. Polycab held 30-31% of the organised domestic wires and cables market in FY26, up from 18-19% in FY19, and management states the next largest player is about half its size. Scale supports procurement, manufacturing and a distribution network through which about 90% of cables and wires sales flow. The company runs a cost-plus model with hedging for copper and aluminium, monthly price revisions for cables and fortnightly revisions for wires. That does not eliminate margin cycles, but it reduces the inventory-gain and inventory-loss swings that spot-buying peers accept.
Q2 FY27 Wires & Cables revenue grew 47% year on year, with domestic sales up 50% on mid-to-high single-digit volume growth. Wires outpaced cables and channel outpaced institutional sales, a mix that supports margin. Segment EBIT margin was 14.2%, above the unchanged 11-13% EBITDA guidance. Management has not raised the range despite repeated quarters above it. The analyst inference is that the range functions as a conservative floor, but the company is not guiding to 14% as a sustainable annual margin.
FMEG is the second growth engine and the main margin-leverage story. The segment turned profitable in Q4 FY25 and has delivered 11 consecutive quarters of industry outperformance. Q2 FY27 revenue grew 124% and EBIT margin reached 10.1%, the first double-digit print. Solar was the largest category and grew multi-fold, helped by PM Surya Ghar and state rooftop incentives. The important caveat is that Polycab sells solar inverters largely on a trading basis and is not manufacturing panels. The FY30 target remains 8-10% EBITDA margin and 1.5x to 2x industry growth. The Q2 EBIT print is not the same as the EBITDA target, and a single strong quarter does not prove the annual margin.
EPC is smaller and more cyclical. Q2 FY27 revenue was INR 6,171 million, up 53% year on year, with EBIT of INR 444 million and a 7.2% margin. The segment executes BharatNet and RDSS, both milestone-linked government programmes. Management described the EPC order book as close to INR 9,000-10,000 crore on the Q2 call, after citing around INR 10,900 crore for BharatNet plus RDSS on the Q1 call. The supplied documents do not reconcile the difference. FY27 revenue guidance from Q1 was INR 800-1,000 crore from BharatNet and around INR 800 crore from RDSS, at high single-digit sustainable margins. The EPC division also pulls Polycab's own cables into government projects, so it has strategic value beyond its segment profit.
The capex path is central to the compounder case. Project Spring targets INR 60-80 billion over five years, with INR 12-16 billion of annual spend. FY26 spend was INR 14.8 billion and H1 FY27 was INR 6.1 billion. About 90% goes to cables and wires capacity, roughly 5% to backward integration and 3-4% to FMEG. Management has previously indicated a 4x to 5x revenue turn on capex with a 1.5-2 year lag, but that is a historical rule of thumb rather than a Q2 FY27 promise. The balance sheet is net cash, so the programme is funded from internal accruals rather than dilution. The dividend payout was 27.2% in FY26, moving toward the 30% FY30 goal.
The most important near-term milestone has slipped. The EHV cable plant was previously guided to commission by end-CY2026, with revenue from FY28. On the Q2 FY27 call management said the plant is now expected to commission somewhere in FY28, with start possibly in April or May. First revenue timing is not specified. The commercial case remains import substitution: about half of domestic EHV consumption was described as imported. But the delay means the new high-voltage product line will not contribute as early as the prior plan, and a further slip would weaken the capex-return case.
Exports are the second swing factor. Q2 FY27 export sales grew 17% year on year and 85% quarter on quarter, recovering from the Q1 disruption. The export share was still about 5% of revenue against a target of more than 10% by FY30. Exports are historically higher margin than domestic cables, so a sustained recovery improves mix. The constraint is that domestic growth is also fast, so the mix can fall even when absolute exports rise. US tariffs and Middle East disruption remain the specific dependencies.
Data centres, defence and EV charging are optionality, not current earnings drivers. Management puts India's installed data centre base at 1.6-1.7 GW and cites reports of 8-10 GW or 15 GW. It supplies conventional cables today and is working on products. The earlier estimate of a INR 20,000-25,000 crore cable market over 6-8 years is context, not a guidance number. Defence special purpose cables are a low-single-digit share of cables revenue with long approval cycles. These pockets can add demand, but they do not yet carry a disclosed revenue target.
Competition is the main structural falsifier. Adani Group and Birla Group announced wires entry, and Q2 FY27 management specifically addressed UltraTech's entry. Management says wires is about 30% of a roughly INR 1.1 lakh crore cables and wires market, with 30-35% of wires still unorganised, and sees no real near-term competition. It is not taking pricing action. If new entrants compete aggressively in mass-market wires, the wires margin, which is the highest in the portfolio, would be exposed.
The legal overhang is specific. Polycab appealed an NCLT admission order relating to a INR 2.79 crore commercial dispute. NCLAT stayed the admission and CIRP in its entirety, and the hearing concluded on 15 October 2026 with the order reserved. Management does not expect a material adverse impact. That is an expectation, not a final order.
On the evidence, Polycab still fits the compounder category. The business has scale, distribution, a cost-plus model and a net cash balance sheet. It has delivered W&C margins above guidance, kept capex inside the planned range, and turned FMEG profitable. The falsifiers are concrete: W&C margin falling below 11%, volume growth failing to sustain 1.5x market growth over 10-12 months, FMEG EBIT fading after the solar-led quarter, EHV slipping again beyond FY28, exports staying near 5% of revenue, or an adverse NCLAT order. The thesis does not require a price target; it requires those operating tests to be met.
companyname: Polycab India Limited ticker: POLYCAB sector: Electrical Equipment / Cables & Wires, FMEG, EPC Polycab India Limited is the largest manufacturer of cables and wires in India, with a 30-31% share of the organised domestic Wires & Cables market as of FY26, up from 18-19% in FY2019. The company also operates a Fast-Moving Electrical Goods (FMEG) consumer business and an Engineering, Procurement and Construction (EPC) division. FY26 revenue was INR 288,838 million with PAT of INR 27,08...
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Explicit forward guidance is unchanged in the supplied calls: Wires & Cables medium-to-long-term EBITDA margin of 11% to 13%; FMEG growth of 1.5x to 2x industry and 8% to 10% EBITDA margin by FY30; EPC high single-digit sustainable margin; exports above 10% of revenue by FY30; and INR 12-16 billion annual capex within a INR 60-80 billion five-year programme. Q2 FY27 reported margins above the W&C range but management did not raise the range.
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