Polycab Stock Down 10% After Ultravolt Entry — Is The Correction A Buying Opportunity? Jefferies Thinks So

Polycab India Share Price Today: Polycab India shares have come under pressure since UltraTech Cement entered the cables and wires market with its Ultravolt brand, but foreign brokerage Jefferies believes the recent correction could be an opportunity rather than a sign of a looming competitive threat. 

Analysts Sonali Salgaonkar and Saurabh Kulkarni have retained their ‘Buy' rating on Polycab with a target price of Rs 11,100, implying around 34% upside.

The stock has fallen around 10% in five trading days following the Ultravolt launch and now trades at roughly 35x one-year forward PE, about 5% below its five-year historical average. Jefferies' assessment is that there is enough room in the fast-growing cables and wires market for a new entrant without materially disrupting Polycab.

Ultravolt Is Big, But The Market Is Bigger

UltraTech began production of Ultravolt in September 2026, earlier than its original December timeline. It has announced around Rs 18 billion of capex, with Rs 9 billion already incurred as of June 2026.

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Even assuming 4–5x asset turns, Jefferies estimates UltraTech's sales could amount to around 5–6% of the overall cables and wires industry by FY30.

The industry was worth around Rs 1.01 trillion in FY26, with nearly 25% still estimated to be informal. With the market expected to expand at around 11–12% annually, Jefferies believes the addressable opportunity is large enough to accommodate another meaningful player.

Polycab's Cable Mix Offers A Cushion

The key distinction, according to Jefferies, is what each company is targeting.

Polycab derives around 70–75% of its C&W revenue from cables, while Ultravolt's initial focus appears to be more concentrated on wires and low-tension cables.

That gives Polycab some protection because large power-transmission and industrial cable projects can require two to four years of pre-qualification, creating a considerably higher entry barrier than in the B2C wire market.

Polycab's nationwide distribution network and broad product portfolio add to that moat. Its C&W market share has increased from 18% in FY20 to 30–31% in FY26.

Thin Industry Margins Leave Little Room For A Price War

Jefferies also sees an important difference between cables and wires and other branded consumer categories such as paints.

The C&W industry operates at an average 10–12% operating margin and 5–7% net margin, well below the profitability levels typically seen in branded paints.

That leaves limited room for a new entrant to use aggressive pricing as a sustained market-share strategy. Any major price cuts could quickly erode already-thin industry margins.

Demand Could Outrun Supply

Jefferies' industry analysis suggests the market may actually face more demand than incremental supply over the next few years.

Between FY26 and FY30, incremental C&W demand is estimated at around Rs 580 billion, compared with roughly Rs 510 billion of incremental supply based on announced capacity plans.

This backdrop further reduces the risk of a major supply-led disruption from Ultravolt, according to the brokerage.

Jefferies Sticks With Rs 11,100 Target

Jefferies expects Polycab to deliver 22% PAT CAGR over FY26–29E, driven by volume growth and improving FMEG margins. It retains annual capex expectations of around Rs 14–15 billion over FY26–29E.

With the recent correction taking the stock below its historical valuation average, Jefferies believes the market reaction to Ultravolt has created an attractive entry point.

The brokerage therefore retains its ‘Buy' call and Rs 11,100 target price, while flagging supply-chain disruptions, weaker demand and sharp copper-price volatility as key risks.

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