Polycab India Ltd Sees Sharp Open Interest Surge Signalling Strong Market Positioning

Open Interest and Volume Dynamics

On 27 Feb 2026, Polycab’s open interest in derivatives rose sharply by 6,349 contracts, a 19.8% increase from the previous OI of 32,058 to 38,407. This notable expansion in OI accompanied a volume of 47,617 contracts, underscoring active participation in both futures and options markets. The futures segment alone accounted for a value of approximately ₹61,659 lakhs, while the options segment’s notional value stood at an impressive ₹45,874 crores, culminating in a total derivatives value of ₹71,388 lakhs.

This surge in OI, combined with elevated volumes, suggests fresh capital inflows and increased speculative interest, often interpreted as a confirmation of the prevailing price trend. The underlying stock price’s strong performance, trading above all major moving averages (5-day, 20-day, 50-day, 100-day, and 200-day), further corroborates this bullish sentiment.

Price Performance and Market Context

Polycab India Ltd has outperformed its sector peers and the broader market indices. The stock gained 1.68% on the day, surpassing the sector’s 0.87% rise and contrasting with the Sensex’s decline of 0.79%. Over the past six consecutive trading sessions, Polycab has delivered an impressive 11.23% return, reflecting sustained buying interest and positive investor sentiment.

On 26 Feb, delivery volumes rose to 3.95 lakh shares, a 5.36% increase over the five-day average, indicating genuine investor participation rather than purely speculative trading. The stock’s liquidity remains robust, with an average traded value sufficient to support trade sizes of up to ₹11.24 crores without significant price impact.

Market Positioning and Directional Bets

The sharp increase in open interest, coupled with rising prices and volumes, points to a strong bullish bias among market participants. Traders appear to be positioning for further gains, possibly anticipating continued demand growth in the cables and electricals sector driven by infrastructure expansion and electrification initiatives.

Polycab’s upgraded Mojo Grade from Hold to Buy on 21 Jul 2025, with a robust Mojo Score of 78.0, reinforces the positive outlook. The company’s large-cap status with a market capitalisation of ₹1,30,210.20 crores adds to its appeal as a stable growth stock within the sector.

Technical indicators support this view, with the stock consistently trading above key moving averages and hitting fresh highs. The rising open interest in futures and options suggests that institutional and retail investors alike are increasing their exposure, potentially through long futures positions and call option buying, signalling confidence in the stock’s upward trajectory.

Sector and Benchmark Comparison

Within the Cables - Electricals sector, Polycab’s outperformance is notable. While the sector index rose 0.87% on the day, Polycab’s 1.68% gain highlights its relative strength. The broader Sensex’s decline of 0.79% further accentuates Polycab’s resilience amid mixed market conditions.

This divergence suggests that investors are selectively favouring Polycab, likely due to its strong fundamentals, market leadership, and positive earnings outlook. The company’s ability to sustain delivery volumes above average levels indicates healthy investor conviction, reducing concerns about speculative excess.

Implications for Investors

For investors, the surge in open interest and volume in Polycab’s derivatives signals an opportunity to capitalise on the stock’s momentum. The combination of technical strength, positive sector dynamics, and upgraded ratings suggests a favourable risk-reward profile.

However, investors should remain vigilant to potential volatility, as rapid increases in open interest can sometimes precede sharp price corrections if market sentiment shifts. Monitoring delivery volumes and price action alongside derivatives data will be crucial to gauge the sustainability of the current trend.

Given Polycab’s large-cap stature and liquidity, it remains a viable candidate for both medium-term investors and active traders seeking exposure to the electrical cables industry’s growth story.

Conclusion

Polycab India Ltd’s recent open interest surge in derivatives, coupled with strong price performance and rising volumes, reflects robust market positioning and bullish sentiment. The stock’s outperformance relative to its sector and benchmark indices, supported by upgraded ratings and solid fundamentals, underscores its appeal as a leading player in the cables and electricals space.

Investors should consider this data as part of a comprehensive analysis, balancing the positive momentum with prudent risk management to navigate potential market fluctuations.

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