Several companies in the cables and wires segment saw their shares come under selling pressure on Thursday, after UltraTech Cement announced its entry into the sector.
Intensified competition, potential pricing pressures, and a shift in market dynamics are the concerns investors are seeing in the ₹845 billion cables and wires market, according to a Mint report.
The entry of UltraTech, an Aditya Birla Group company, into the segment with an ₹18 billion planned investment is part of its strategy to become a comprehensive ‘Building Solutions’ provider.
As a result, Polycab India which is the largest cable & wires company in India, saw its shares tumbling as much as 17.6%, reaching ₹4,751 apiece.
Meanwhile, KEI Industries fell 20% to hit ₹3,038, Havells India dropped 9% to ₹1,140 apiece, and R R Kabel plunged by 14% to hit an all-time low of ₹954 apiece.
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However, UltraTech Cement shares also dropped 5% to ₹10,415 apiece.
The development comes at a time when the cables & wires industry has been growing rapidly in recent years, due to a strong government focus on infrastructure development, the rising trend of nuclear families, an increase in electrification in rural areas, and an increase in exports of cables & wires, according to the report.
Apart from this, the industry would also benefit from government policies such as PLI incentives for components.
Brokerage Nuvama believes that UltraTech’s entry is unlikely to have any impact on the FY25–28 earnings of the current players, according to the report which added that it retains a bullish stance on KEI Industries, Polycab, and Havells.
