Polycab Shares Plunge 4% Despite Q1 Earnings Beat as NSE Midcap 50 Sees Heavy Selling

Polycab Shares Plunge 4% Despite Q1 Earnings Beat as NSE Midcap 50 Sees Heavy Selling​

Polycab India Ltd shares witnessed a significant sell-off on Friday, sliding nearly 4 percent to Rs 8,850 in afternoon trade. This decline marks the third consecutive session of losses for the wires and cables major, making it the top loser on the NSE Midcap 50 index.

Despite the immediate price action, the stock remains positioned strongly in the broader timeframe. Polycab shares are up 15.5 percent so far in 2026, outperforming the Nifty 50 which has seen a 7.1 percent decline during the same period.

Resilience Amidst Market Correction​

The company, which commands a market capitalization of more than Rs 1.33 lakh crore, faced a 3.96 percent intraday drop on Friday. This follows a cumulative 7.2 percent decline over three sessions, including a 1.2 percent dip on Thursday.

Investors reacted to the technical correction despite the underlying fundamental strength reported in the company's June-quarter results. The data showed Polycab successfully beating Street expectations across several key financial parameters.

Robust Revenue and EBITDA Growth​

Revenue for the period surged 39 percent year-on-year to Rs 8,209 crore, comfortably exceeding the CNBC-TV18 poll estimate of Rs 7,902 crore. The company reported Rs 5,906 crore in the corresponding year-ago quarter.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 32.5 percent to Rs 1,136 crore, surpassing the poll estimate of Rs 1,062 crore. While the EBITDA margin narrowed by 70 basis points year-on-year to 13.8 percent, it still outperformed the expected 13.4 percent.

Growth Engines in Wires and FMEG Segments​

The core wires and cables business reported a 38 percent year-on-year revenue increase to Rs 7,202 crore. Segment EBIT rose to Rs 959 crore from Rs 756 crore as domestic wire revenue grew 43 percent.

Growth was bolstered by healthy demand and the execution of the company's Project Spring initiative. Notably, the wires segment outperformed cables during this quarter, with higher channel sales recorded over institutional sales within the cables business.

The fast-moving electrical goods (FMEG) division saw a massive revenue surge of 71 percent year-on-year. Solar products emerged as a major growth driver, with sales doubling and becoming the largest category within Polycab's FMEG portfolio. This segment benefited from operating leverage and a premium product mix, pushing the EBIT margin to 8 percent.

Strategic Analyst Outlook on Power and Capex​

Major brokerages remain bullish on the company's trajectory despite the recent price volatility. Jefferies maintained its 'Buy' rating with a target price of Rs 11,100 per share, representing a potential 20 percent upside from Thursday's levels.

Jefferies highlighted Polycab's ability to grow despite the West Asia conflict, noting that the company serves as a primary play on India's power and capital expenditure cycle. The firm expects a 22 percent EPS compound annual growth rate over FY26-29.

HSBC also maintained its 'Buy' rating with a target price of Rs 10,160 per share. The brokerage attributed the earnings beat to realization-led growth in wires and cables alongside the scaling up of the FMEG business. HSBC projects an EPS CAGR of around 21 percent over FY26-29 while noting that copper and aluminium price volatility remains a key risk factor.