In recent trading sessions, Polycab India, a prominent manufacturer of electrical wires and cables, has displayed remarkable momentum, achieving a new all-time high of ₹7,353 per share. This surge follows a significant 13.14% increase over the past eight trading sessions, moving from ₹6,475 to ₹7,326. The stock has resumed its upward trajectory after consolidating in a narrow range for nearly three months, and the recent breakout has sparked renewed investor interest.

On Tuesday, shares of Polycab jumped nearly 6%, confirming the bullish trend. According to JM Financial, the stock had previously been consolidating between ₹6,300 and ₹6,925, but the breakout last Friday signified a shift in momentum. This shift is supported by higher-than-average trading volumes, indicating increased buying activity. JM Financial also noted that the series has begun with a cumulative future open interest of 2.2 million shares, which increased to 2.3 million shares after the breakout. Historical data suggests that, over the past five years, Polycab has shown positive returns in October, closing in the green on three occasions with an average return of 7%.

The brokerage firm has set a target price of ₹7,700 for Polycab shares, with a stop-loss recommendation of ₹6,600. These optimistic projections are underscored by the company's solid fundamentals and favorable market conditions.

UBS, a global brokerage firm, has also initiated coverage on Polycab India, assigning a 'buy' rating and a sum-of-the-parts (SOTP)-based price target of ₹8,550, the highest target on the Street. UBS emphasizes that Polycab, holding a 40% market share in the domestic electrification market, is well-positioned to benefit from several cyclical tailwinds in the cables and wires sector. The increasing demand for low-voltage infrastructure in India is particularly advantageous for Polycab's growth prospects.

UBS highlights Polycab's competitive advantages, which include its extensive manufacturing capacity and robust B2C network, alongside significant B2B operations. The company's distribution-led export business model offers additional growth opportunities in relatively untapped overseas markets. Key near-term triggers for Polycab's performance include better-than-expected domestic volume growth, market share gains, and an uptick in exports.

In alignment with this bullish sentiment, Jefferies has raised its price target for Polycab to ₹7,970, while maintaining a 'buy' rating.

Motilal Oswal, another domestic brokerage, initiated coverage on Polycab back in April, setting a target price of ₹7,500. They project that Polycab's revenue will grow at a 14% compound annual growth rate (CAGR) over FY24–26, driven by a 15% growth in the cables and wires segment and a 10% growth in the fast-moving electrical goods (FMEG) segment. Furthermore, Motilal Oswal anticipates a 14.5% CAGR for EBITDA and a 15% CAGR for profit during the same period. They project EBITDA margins to be 13.6% in FY24, 13.1% in FY25, and 13.7% in FY26, compared to 13.1% in FY23 and an average of 12% over FY18–23.

The Indian cables and wires industry, along with FMEG products, is estimated to be valued at ₹1.8 trillion in FY23. This industry's growth has been fueled by a strong government focus on infrastructure development, a rising trend of nuclear families, increased electrification in rural areas, and a surge in cable and wire exports.

Investors looking to capitalize on the opportunities within the electrical sector should closely monitor Polycab India as it continues to demonstrate strong potential for growth.

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