Shares of Polycab India Ltd fell nearly 4 percent on Friday, extending losses for the third straight session, even as the wires and cables manufacturer reported better-than-expected fiscal first quarter earnings. Brokerages Jefferies and HSBC maintained their bullish ratings on the stock.

Polycab shares declined 3.96 percent to Rs 8,850 in afternoon trade, making the stock the top loser on the NSE Midcap 50. The stock has now fallen 7.2 percent over three sessions, including Friday, after declining 1.2 percent on Thursday. Despite the recent correction, Polycab shares remain up 15.5 percent so far in 2026, compared with a 7.1 percent decline in the Nifty 50. The company commands a market capitalisation of more than Rs 1.33 lakh crore.

The decline came after Polycab reported June-quarter results that beat Street expectations across key parameters. Revenue jumped 39 percent year-on-year to Rs 8,209 crore, exceeding the CNBC-TV18 poll estimate of Rs 7,902 crore. Revenue stood at Rs 5,906 crore in the year-ago quarter.

Strong wires and cables growth, FMEG surge drive Polycab's Q1 earnings beat

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 32.5 percent from a year earlier to Rs 1,136 crore, ahead of the poll estimate of Rs 1,062 crore. EBITDA margin, however, narrowed 70 basis points year-on-year to 13.8 percent, but was better than the 13.4 percent expected by the poll.

The core wires and cables business reported a 38 percent year-on-year increase in revenue to Rs 7,202 crore, while segment EBIT rose to Rs 959 crore from Rs 756 crore. Domestic wires and cables revenue grew 43 percent, supported by healthy demand and execution under the company's Project Spring initiative. The wires segment outperformed cables during the quarter, while channel sales were higher than institutional sales within the cables business.

The fast-moving electrical goods (FMEG) business delivered stronger growth, with revenue surging 71 percent year-on-year across product categories. Solar products were a major growth driver, with sales doubling from a year earlier and the category becoming the largest within Polycab's FMEG portfolio. Segment EBIT margin expanded to 8 percent, helped by operating leverage and a more premium product mix.

Revenue from the engineering, procurement and construction (EPC) business declined 11 percent year-on-year, reflecting the timing of project execution, while its EBIT margin stood at 11 percent.

Brokerages bullish on power, capex demand and FMEG scale-up

Jefferies maintained its 'Buy' rating on Polycab with a target price of Rs 11,100 per share, implying an upside of about 20 percent from Thursday's close. The brokerage highlighted the company's strong performance despite the West Asia conflict, with wires and cables and FMEG sales growing 39 percent and 71 percent, respectively.

Jefferies said growth in wires and cables was driven by pricing, although the segment's EBIT margin declined 140 basis points to 13.3 percent. In contrast, FMEG margin expanded by 590 basis points to 8 percent.

The brokerage raised its FY27 and FY28 earnings per share estimates by 2-3 percent and expects Polycab to deliver a 22 percent EPS compound annual growth rate over FY26-29. It views the company as a play on India's power and capital expenditure cycle. Jefferies said that following a 21 percent rally over the past month, the stock trades at 42 times FY27 and 35 times FY28 estimated earnings, compared with its five-year average multiple of 37 times.

HSBC also maintained a 'Buy' rating with a target price of Rs 10,160 per share. The brokerage said realisation-led growth in wires and cables, along with a strong FMEG performance, drove an earnings beat of around 10 percent.

HSBC expects demand, capacity expansion and the scaling up of the FMEG business to support an EPS CAGR of around 21 percent over FY26-29. It noted that Polycab trades at 35 times FY28 estimated earnings, while flagging volatility in copper and aluminium prices as a key risk.