Shares of cable and wire corporations crashed on Thursday, with some tumbling as a lot as 21 per cent, following UltraTech Cement’s announcement of its entry into the section. The sell-off got here regardless of benchmark indices ending flat, with the Nifty closing at 22,545.05, down 0.01 per cent, and Sensex ending at 74,612.43, up 0.01 per cent.
KEI Industries bore the brunt, crashing 21.30 per cent to shut at ₹2,989, whereas RR Kabel plunged 19.68 per cent to ₹892. Market chief Polycab India slumped 18.88 per cent to ₹4,677, and Finolex Cables fell 6.22 per cent to ₹839.95. Even UltraTech Cement shares ended 4.69 per cent decrease at ₹10,450.
The sharp response got here after UltraTech Cement, the cement flagship of the Aditya Birla Group, introduced on February 25 that its board has accepted a ₹1,800 crore capital expenditure plan to enter the wires and cables section. The corporate plans to arrange a producing plant close to Bharuch in Gujarat, anticipated to be commissioned by December 2026.
“We intend to develop our presence within the development worth chain via our foray within the cables and wires section, which aligns with our imaginative and prescient of offering complete options to our finish clients within the development sector,” stated Kumar Mangalam Birla, Chairman, Aditya Birla Group, within the firm’s press launch.
Market consultants imagine the response may be overdone, contemplating UltraTech’s plant will solely turn into operational by late 2026.
Margin stress
“When a serious participant with a robust model, sturdy provide chain, and powerful distribution community enters into the enterprise, the prevailing gamers’ margins get impacted,” stated Kranthi Bathini, Director of Fairness Technique at WealthMills Securities.
“However how lengthy it is going to take for them to know the enterprise and which section they’re going to focus on — these questions are untimely.”
Bathini added that the prevailing damaging market sentiment amplified the promoting stress. “It’s a double whammy. When market sentiment is weak, the impression of damaging information is greater. No one is aware of what sort of impression they’re going to have, however nonetheless, everyone offered.”
“These can’t be termed simply revenue reserving, but in addition the impression is extra,” Bathini defined. “When the market is in a downtrend, when the market sentiment is weak, the impression of optimistic information can be very much less, until it’s extraordinarily optimistic.”
The cable and wires business has been rising at a compound annual development charge (CAGR) of round 13 per cent between FY19 and FY24, in keeping with a report by Nuvama Edelweiss Securities. The business can be witnessing a shift from unorganised to organised gamers, with organised market share rising from 68 per cent in FY19 to 73 per cent in FY24.
UltraTech’s entry comes amid rising uncooked materials prices and intensifying competitors. A current BNP Paribas report famous that copper costs have risen 13 per cent year-on-year, whereas aluminum costs are up 24 per cent. Main manufacturers carried out value hikes of 2-3 per cent in February 2025, however unorganised gamers proceed to compete aggressively on pricing.
Not like the concentrated paints business, the cables and wires sector stays fragmented, with the most important participant, Polycab, holding lower than 18 per cent market share. Different important gamers embrace KEI Industries (7.4 per cent), Havells (7.3 per cent), Finolex Cables (5.6 per cent), and RR Kabel (4.9 per cent).
Jio second?
Market analysts examine this example to earlier disruptions in different sectors. “In the event you bear in mind when Jio entered, how Bharti Airtel bought overwhelmed. After a while, it rebounded. It took time to know the ferocity,” Bathini famous.
The business is present process important growth, with main gamers planning a capex of roughly ₹10,656 crore for FY25-FY27, in comparison with ₹4,681.3 crore spent throughout FY22-FY24.
Whereas UltraTech’s entry is just not anticipated to impression the earnings of cable and wire corporations within the quick time period (FY25-FY28), analysts imagine it may drive consolidation in the long term, probably pushing unorganized gamers out of the market.
“The precise ferocity will come to mild as soon as they begin their operations,” Bathini concluded.
