UltraTech Cement: On February 27, 2025, shares of major Indian cable and wire manufacturers experienced significant declines following UltraTech Cement’s announcement of its entry into the cables and wires (C&W) market. This move has raised concerns about increased competition and potential market shifts.

Key Stock Movements:

Polycab India Ltd: Shares fell by 17.6%, closing at ₹4,751.
KEI Industries Ltd: Experienced a 20% drop, ending at ₹3,038.
Havells India Ltd: Saw a 9% decrease, settling at ₹1,140.
R R Kabel Ltd: Shares plunged by 14%, reaching an all-time low of ₹954.

UltraTech Cement, a prominent entity within the Aditya Birla Group, has committed ₹18 billion to establish its presence in the ₹845 billion C&W market as part of its strategy to become a comprehensive building solutions provider. This investment is slated for deployment over the next two years, with operations expected to commence by December 2026.

Market analysts suggest that UltraTech’s foray into the C&W sector may intensify competition, potentially leading to pricing pressures and altered market dynamics for existing players. Despite UltraTech’s relatively modest capital allocation to this segment—less than 2% of its FY24 total gross block—its entry has notably impacted investor sentiment.

In response to this diversification, UltraTech Cement’s own shares declined by 5%, closing at ₹10,415.

While UltraTech’s market share in the C&W industry is projected to remain below 5% in the medium term, its entry is anticipated to accelerate the shift from unorganized to organized market participants, fostering healthy competition among established companies.

Industry experts believe that UltraTech’s entry is unlikely to significantly impact the earnings of existing C&W companies between FY25 and FY28. However, they advise monitoring any additional investments by UltraTech that could influence the long-term demand-supply dynamics within the sector.