UltraTech's Foray into Wires & Cables Industry Sends KEI, Polycab, and Other Stocks Tumbling
The Indian stock market witnessed a sharp decline in the shares of leading wires and cables manufacturers on February 27, 2025, following UltraTech Cement's announcement of its entry into the segment. The move triggered a sell-off, causing significant losses for key players like KEI Industries, Polycab India, RR Kabel, Havells India, and Finolex Cables.
Market Impact of UltraTech’s Announcement
UltraTech Cement, a part of the Aditya Birla Group, declared its expansion into the wires and cables business with a planned capital investment of ₹1,800 crore over the next two years. This announcement led to a panic reaction in the market, causing share prices of existing players to plunge:
KEI Industries and Polycab India shares dropped 15%
RR Kabel stock declined 13%
Havells India and Finolex Cables fell 7.47% and 4.96%, respectively
At 10:00 AM on February 27, the stocks continued to show weakness on the National Stock Exchange (NSE).
UltraTech's Expansion Strategy
UltraTech Cement aims to establish a state-of-the-art wires and cables manufacturing plant in Bharuch, Gujarat, which is expected to be operational by December 2026. The company plans to leverage its extensive manufacturing expertise and strong customer base in the construction sector to position itself as a key player in the growing wires and cables market.
According to Kumar Mangalam Birla, Chairman of Aditya Birla Group, this expansion aligns with the company's long-term strategy of strengthening its presence in the construction value chain. He emphasized that while UltraTech remains focused on its core cement business, this new foray will complement its existing offerings, providing a one-stop solution for the construction industry.
The Growing Wires & Cables Market in India
The wires and cables (W&C) industry has seen remarkable growth, with a CAGR of around 13% between FY19 and FY24. With rising demand in residential, commercial, industrial, and infrastructure sectors, the industry is expected to maintain strong momentum. Additionally, the ongoing shift from the unorganized to the organized market further strengthens growth prospects for leading players.
What Lies Ahead for Existing Players?
UltraTech's entry into this segment raises concerns about intensified competition for established brands such as KEI Industries, Polycab India, and RR Kabel. These companies may need to enhance their product offerings, focus on technological advancements, and strengthen their market positioning to stay ahead in the game.
While the short-term impact of UltraTech’s announcement has been negative for stock prices, it remains to be seen how existing players adapt to the evolving competitive landscape in the long run.
Conclusion
UltraTech Cement’s ambitious expansion into the wires and cables sector marks a significant shift in India’s construction and infrastructure landscape. While its entry has temporarily disrupted the stock market, the long-term impact will depend on how effectively UltraTech executes its plans and how current industry leaders respond to the challenge. Investors and market watchers will be keenly observing the developments in this space in the coming months.
Reference from:-https://upstox.com/news/market-news/stocks/kei-industries-polycab-havells-india-and-rr-kabel-share-price-in-focus-as-ultra-tech-forays-into-wires-and-cables-segment/article-148704/