Shares of cable and wire companies crashed on Thursday, with some tumbling as much as 21 per cent, following UltraTech Cement’s announcement of its entry into the segment. The sell-off came despite 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 close at ₹2,989, while RR Kabel plunged 19.68 per cent to ₹892. Market leader 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 lower at ₹10,450.
The sharp reaction came after UltraTech Cement, the cement flagship of the Aditya Birla Group, announced on February 25 that its board has approved a ₹1,800 crore capital expenditure plan to enter the wires and cables segment. The company plans to set up a manufacturing plant near Bharuch in Gujarat, expected to be commissioned by December 2026.
“We intend to expand our presence in the construction value chain through our foray in the cables and wires segment, which aligns with our vision of providing comprehensive solutions to our end customers in the construction sector,” said Kumar Mangalam Birla, Chairman, Aditya Birla Group, in the company’s press release.
Market experts believe the reaction might be overdone, considering UltraTech’s plant will only become operational by late 2026.
Margin pressure
“When a major player with a strong brand, strong supply chain, and strong distribution network enters into the business, the existing players’ margins get impacted,” said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
“But how long it will take for them to grasp the business and which segment they’re going to target — these questions are premature.”
Bathini added that the prevailing negative market sentiment amplified the selling pressure. “It’s a double whammy. When market sentiment is weak, the impact of negative news is higher. Nobody knows what kind of impact they’re going to have, but still, everybody sold.”
“These cannot be termed just profit booking, but also the impact is more,” Bathini explained. “When the market is in a downtrend, when the market sentiment is weak, the impact of positive news will be very less, unless it’s extremely positive.”
The cable and wires industry has been growing at a compound annual growth rate (CAGR) of around 13 per cent between FY19 and FY24, according to a report by Nuvama Edelweiss Securities. The industry is also witnessing a shift from unorganised to organised players, with organised market share rising from 68 per cent in FY19 to 73 per cent in FY24.
UltraTech’s entry comes amid rising raw material costs and intensifying competition. A recent BNP Paribas report noted that copper prices have risen 13 per cent year-on-year, while aluminum prices are up 24 per cent. Major brands implemented price hikes of 2-3 per cent in February 2025, but unorganised players continue to compete aggressively on pricing.
Unlike the concentrated paints industry, the cables and wires sector remains fragmented, with the largest player, Polycab, holding less than 18 per cent market share. Other significant players include 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 moment?
Market analysts compare this situation to previous disruptions in other sectors. “If you remember when Jio entered, how Bharti Airtel got beaten. After some time, it rebounded. It took time to understand the ferocity,” Bathini noted.
The industry is undergoing significant expansion, with major players planning a capex of approximately ₹10,656 crore for FY25-FY27, compared to ₹4,681.3 crore spent during FY22-FY24.
While UltraTech’s entry is not expected to impact the earnings of cable and wire companies in the short term (FY25-FY28), analysts believe it could drive consolidation in the long run, potentially pushing unorganized players out of the market.
“The actual ferocity will come to light once they start their operations,” Bathini concluded.
