Polycab to Havells: C&W Stocks Drop 13% on UltraTech’s Entry. Shares in the cables and wires sector saw a sharp decline on February 27 after UltraTech announced its expansion into the segment, raising concerns over market competition and pricing. Polycab India and KEI Industries hit their 10% lower circuits, while Havells India fell by 9%.
Market Reaction: Sharp Decline in Stock Prices
Investors reacted strongly to UltraTech’s entry into the segment, causing a significant downturn in major C&W stocks.
Key Market Movements:
- Polycab India: Hit a 10% lower circuit, closing at ₹5,189.
- KEI Industries: Also reached its 10% lower circuit limit.
- Havells India: Dropped 9% to ₹1,140.
- R R Kabel: Fell 13%, hitting an all-time low of ₹965.60.
UltraTech’s Strategic Expansion
UltraTech, a part of the Aditya Birla Group, is expanding beyond cement into the C&W market as part of its broader vision to become a comprehensive Building Solutions provider. This entry into the ₹1.8 trillion industry is expected to shake up the existing competitive landscape.
Ultratech Enters Cables & Wires Industry | @UltraTechCement is planning to enter the wires & cables business with a capex of Rs 1,800 cr over 2 years. A plant in Gujarat is expected to be commissioned by December 2026@Nigel__DSouza pic.twitter.com/p0mlHNqRum
— CNBC-TV18 (@CNBCTV18News) February 27, 2025
Why Are Investors Worried?
UltraTech’s entry into the C&W market has sparked concerns among investors due to several factors:
- Increased Competition: The presence of a major player like UltraTech could disrupt market share distribution.
- Pricing Pressure: Potential price wars may reduce profit margins for existing companies.
- Market Dynamics Shift: Established brands may need to adjust their strategies to maintain a competitive edge.
What Lies Ahead for the C&W Sector?
While UltraTech’s entry poses challenges, it could also lead to industry-wide innovations and potential growth opportunities. Existing players may need to focus on:
- Strengthening brand positioning
- Expanding product offerings
- Enhancing operational efficiency
- Exploring new market segments
Conclusion
UltraTech’s strategic move has significantly impacted the C&W sector, triggering a sharp market reaction. The long-term effects will depend on how existing players respond to the evolving competitive landscape.