UltraTech Cement
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 diversify UltraTech’s portfolio and strengthen its presence in the construction value chain. The company intends to establish a manufacturing plant in Bharuch, Gujarat, with operations expected to commence by December 2026. citeturn0news21
The announcement had an immediate impact on the stock market. UltraTech Cement’s shares declined by over 4% on February 27, 2025, following the news of its foray into the wires and cables sector. citeturn0search0 This decline reflects investor concerns about the company’s capital allocation strategy and the potential risks associated with entering a new industry.
The entry of UltraTech Cement into the wires and cables market has also affected the stock prices of established players in the sector. Shares of Polycab India and KEI Industries hit their 10% lower circuit limits, indicating a significant sell-off by investors. Polycab’s shares nosedived 15% to ₹4,894.80, while KEI Industries was locked in a 15% lower circuit at ₹3,226.65. citeturn0search5 This sharp decline reflects market apprehension about increased competition and potential pricing pressures in the wires and cables industry.
The wires and cables sector has experienced a compound annual growth rate (CAGR) of approximately 13% between fiscal years 2019 and 2024, indicating robust growth. However, the market is characterized by intense competition, with established players like Polycab and Havells holding significant market shares. The entry of a major player like UltraTech Cement is expected to intensify competition, potentially leading to pricing pressures and market share redistribution. citeturn0news21
In response to UltraTech’s announcement, shares of other companies in the cables and wires sector have also experienced declines. Havells India, for instance, dropped 9% in trade to ₹1,140 per share. citeturn0search2 This widespread downturn reflects investor concerns about the potential impact of UltraTech’s entry on the profitability and market dynamics of existing players in the industry.
In summary, UltraTech Cement’s decision to enter the wires and cables business has led to a significant decline in its stock price and has adversely affected the stock prices of established companies in the sector. While the move aims to diversify UltraTech’s business operations, it has raised concerns among investors about increased competition and potential market disruptions in the wires and cables industry.
For a detailed analysis of UltraTech Cement’s stock performance following its entry into the wires and cables sector, you can watch the following video:
videoUltraTech Slips 4% In Trade Post The Cable & Wiring Forayturn0search4
