UltraTech’s entry into cables and wires sector sparks market turmoil
NEW DELHI: The entry of UltraTech, the flagship cement company of the Aditya Birla Group, into the cables and wires (C&W) business has triggered a sharp decline in the shares of existing players in the market.
Analysts believe that India’s largest cement manufacturer will have a significant advantage in establishing itself in this sector, benefiting from its extensive distribution network and the ability to source raw materials efficiently within the group.
On Thursday, shares of major C&W companies plummeted: Polycab Ltd dropped 19% to ₹4,677, KEI Industries crashed over 21% to ₹2,989, and R R Kabel fell 20% to ₹892. Finolex Cables and Havells also saw declines of 6% and 7%, respectively.
Vishnu Kant Upadhyay, AVP – Research & Advisory at Master Capital Services, noted that UltraTech’s entry could disrupt the historically stable C&W sector.
“This might hurt the prospects for the current competitors. Additionally, UltraTech might be in a stronger position to purchase raw materials from group companies like Hindalco, such as copper and aluminium,” added Upadhyay.
He explained that in this market, no single company controls more than 15% of the wires and 20% of the cables.
“In the medium run, Ultratech Cement’s arrival is anticipated to have a minor effect on C&W industry volumes and profitability as it will take a few years for UltraTech’s factory to start up,” said Upadhyay.
UltraTech announced on Tuesday its plans to enter the C&W business with a capital expenditure of ₹1,800 crore over the next two years. The company will set up a manufacturing plant near Bharuch, Gujarat, which is expected to be operational by December 2026.
