India’s cables and wires industry enters multi-year growth phase, CLSA

India’s cables and wires sector is entering a multi-year structural growth cycle, according to CLSA, which initiated coverage on Polycab India, KEI Industries and RR Kabel, arguing that demand from infrastructure, electrification, manufacturing and exports will continue to favour established players despite intensifying competition.

The brokerage initiated ‘Outperform’ ratings on Polycab India and RR Kabel, while assigning a ‘Hold’ rating to KEI Industries, saying the industry’s long-term fundamentals remain compelling but valuations differ across companies.

CLSA set a target price of Rs 10,150 on Polycab, implying upside of nearly 14%, and described the company as well positioned to benefit from its market leadership, execution capabilities and product breadth. It said Polycab’s scale, distribution network and premium product portfolio should allow it to consolidate market share as India’s cables market becomes increasingly organised.

For RR Kabel, CLSA also initiated with an ‘Outperform’ rating and a target price of Rs 2,850, seeing upside of around 14%. CLSA believes RR Kabel’s integrated manufacturing model and growing international presence position it well to capitalise on structural demand trends, even as new entrants increase competitive intensity.

On KEI Industries, however, CLSA took a more balanced stance, initiating coverage with a ‘Hold’ rating and a target price of Rs 4,800, implying limited upside from current levels.

Sector-wide, CLSA expects demand to remain strong, supported by India’s infrastructure buildout, electrification, renewable energy investments, data centres and manufacturing expansion.

‘Wired for growth’
CLSA on polycab

• Initiate Outperform; Target Price: Rs 10,150.
• Sees Polycab’s market leadership and favourable industry tailwinds driving sustained growth.
• Industry growth is increasingly favouring market leaders.
• Expects sustained growth backed by scale and strong execution.
• Forecasts 17% revenue CAGR and 15% PAT CAGR over FY26-30.
• Believes strong execution, rising exports and premiumisation will reinforce Polycab’s leadership over the medium term.

CLSA on KEI Industries

• Initiate Hold; Target Price: Rs 4,800.
• Sees strong fundamentals with fair valuations.
• High-specification and extra high-voltage (EHV) cables are expected to be the next key growth driver.
• Believes KEI has built a strong foundation to capitalise on future opportunities.
• Capacity expansion is expected to translate into higher growth.
• Forecasts 20% revenue CAGR and 17% PAT CAGR over FY26-30.

CLSA on RR Kabel

• Initiate Outperform; Target Price: Rs 2,850.
• Sees ambitions supported by expanding manufacturing capabilities.
• Industry demand tailwinds remain favourable, though new entrants pose a potential risk.
• Expects a strong growth pipeline over the coming years.
• Forecasts 18% revenue CAGR and 24% PAT CAGR over FY26-30.

NDTV Profit