KEI
On February 25, 2025, UltraTech Cement, India’s largest cement producer, announced plans to invest ₹1,800 crore (approximately $206 million) to enter the wires and cables business. This strategic move aims to expand UltraTech’s footprint in the construction materials sector, which includes products like waterproofing solutions, TMT steel bars, plywood, sanitary ware, hand tools, and electrical components such as switchboards. The company intends to establish a manufacturing plant near Bharuch in Gujarat, with operations expected to commence by December 2026. citeturn0news22
The announcement has significantly impacted the stock market, particularly affecting leading wires and cables manufacturers. Shares of Polycab India, KEI Industries, and Havells India experienced sharp declines, with Polycab’s stock plummeting 15% to ₹4,894.80, KEI Industries’ shares locked in a 15% lower circuit at ₹3,226.65, and Havells India dropping 7% to ₹1,442.55. RR Kabel also saw a 13% slide. citeturn0search2
The entry of UltraTech Cement into the wires and cables segment is seen as a potential disruptor in the industry. Analysts at J.P. Morgan have expressed concerns that UltraTech’s move could lead to increased competition, potentially squeezing the margins of existing players. citeturn0search12
In response to the market reaction, Jefferies analysts have suggested that any immediate negative market reaction to UltraTech’s entry should be viewed as a buying opportunity. They note that while the new segment targets a similar customer base as cement, the sales channels differ. Additionally, they estimate that the new segment could account for 10-12% of UltraTech’s revenue and 6-9% of its EBITDA in FY25. citeturn0search6
The wires and cables market in India has been growing at a compound annual growth rate (CAGR) of about 13% between fiscal years 2019 and 2024. This growth is driven by increasing infrastructure development, urbanization, and industrialization. The market is currently dominated by established players like Polycab, Havells, and KEI Industries. The entry of a major player like UltraTech Cement is expected to intensify competition, potentially leading to pricing pressures and market share shifts.
In summary, UltraTech Cement’s foray into the wires and cables segment marks a significant development in the Indian construction materials industry. While it presents growth opportunities for UltraTech, it also introduces new challenges for existing manufacturers, who may need to adapt to the evolving competitive landscape.
For a more detailed analysis, you can watch the following video:
videoUltraTech Cement Enters Cable & Wires Segmentturn0search0
