Open Interest and Volume Dynamics
The latest data reveals that Polycab's open interest (OI) in derivatives has jumped by 4,574 contracts, a 14.27% increase from the previous figure of 32,058 to 36,632. This notable rise in OI is accompanied by a futures volume of 33,656 contracts, underscoring active trading interest. The combined futures and options value stands at approximately ₹5,256 crores, with futures alone accounting for ₹456.5 crores, reflecting substantial capital flow into the stock's derivatives market.
Such a surge in open interest, especially when paired with rising prices, typically indicates fresh buying interest and the building of long positions by market participants. This is further corroborated by the stock’s underlying value of ₹8,665, which aligns closely with its recent intraday high, suggesting that the derivatives market is closely tracking the spot price movements.
Price Performance and Market Positioning
Polycab India Ltd has outperformed its sector peers and the broader market, delivering a 1.92% gain on the day compared to the sector’s 0.52% rise and the Sensex’s 0.84% decline. The stock has been on a consistent upward trajectory, registering gains for six consecutive sessions and delivering an impressive 11.35% return over this period. This momentum has pushed the stock above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a strong bullish trend.
Investor participation has also intensified, with delivery volumes rising to 3.95 lakh shares on 26 February, a 5.36% increase over the five-day average. This suggests that the rally is supported by genuine buying interest rather than speculative short-term trading, enhancing the sustainability of the uptrend.
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Market Sentiment and Directional Bets
The simultaneous rise in open interest and price is a classic indicator of fresh long positions being established, reflecting bullish market sentiment. Traders and institutional investors appear to be positioning for further upside, buoyed by Polycab’s strong fundamentals and sectoral tailwinds. The stock’s mojo score of 78.0 and an upgraded mojo grade from Hold to Buy on 21 July 2025 further reinforce the positive outlook.
Polycab’s large-cap status with a market capitalisation of ₹1,28,629 crores and a market cap grade of 1 indicates robust institutional interest and liquidity, making it a preferred choice for portfolio allocation within the cables and electricals sector. The stock’s liquidity profile supports sizeable trade sizes, with an estimated tradable value of ₹11.24 crores based on 2% of the five-day average traded value, ensuring smooth execution for large investors.
Technical and Fundamental Outlook
Technically, Polycab’s breach of its previous highs and sustained trading above all major moving averages signal a strong uptrend with limited immediate resistance. The stock’s consistent gains over the past week and rising delivery volumes suggest that the rally is backed by genuine demand rather than short-covering or speculative activity.
Fundamentally, Polycab continues to benefit from robust demand in the electrical cables segment, driven by infrastructure development and electrification initiatives across India. The company’s strong mojo grade upgrade to Buy reflects improved earnings prospects, operational efficiencies, and favourable sector dynamics.
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Implications for Investors
For investors, the surge in open interest alongside strong price momentum suggests a favourable risk-reward profile in Polycab India Ltd. The stock’s ability to outperform its sector and the broader market amid mixed market conditions highlights its relative strength. However, investors should remain mindful of potential volatility given the elevated valuations and monitor open interest trends closely for signs of profit booking or position unwinding.
Given the company’s upgraded mojo grade and strong fundamentals, Polycab remains a compelling pick within the cables and electricals sector, particularly for those seeking exposure to infrastructure-driven growth themes. The current market positioning indicates that participants are betting on sustained upside, supported by improving earnings visibility and sector tailwinds.
Conclusion
Polycab India Ltd’s recent open interest surge in derivatives, coupled with a steady price rally and rising volumes, underscores a robust bullish sentiment among market participants. The stock’s technical strength, fundamental upgrades, and strong liquidity profile make it a key contender for investors looking to capitalise on growth in the electrical cables industry. While the momentum remains positive, prudent monitoring of market positioning and valuation metrics will be essential to navigate potential near-term fluctuations.
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