Cable Stocks Crash: KEI, Polycab, RR Kabel, Finolex Fall Upto 8% As UltraTech Launches Ultravolt

Shares of wires and cables companies came under heavy selling pressure on Friday after UltraTech Cement, part of the Aditya Birla Group, formally entered the segment with the launch of Ultravolt. The move raised concerns about tougher competition for established players including KEI Industries, Polycab India, RR Kabel and Finolex Cables.

KEI Industries was among the biggest losers, falling more than 8% to an intraday low of ₹4,848.50. Polycab India declined more than 5% to ₹8,300, while RR Kabel fell around 5%. Finolex Cables and Havells India also traded lower during morning deals.

UltraTech shares, however, remained largely steady with a positive bias.

Why are cable stocks falling today?

The selling followed the Aditya Birla Group's launch of Ultravolt, its wires and cables business housed under UltraTech Cement. The group has committed ₹1,800 crore to the venture and said Ultravolt will be the second-largest player in the wires segment by capacity at launch.

UltraTech has set an ambitious target of becoming one of India's top two players in the segment within five years. The company plans a national rollout and intends to use UltraTech's existing distribution network to expand its reach.

The scale and financial strength of the new entrant have raised concerns that established companies could face greater pressure on pricing, distribution spending and margins.

UltraTech's Ultravolt entry raises competition concerns

The entry comes just 18 months after the Aditya Birla Group announced its plans to enter the wires and cables market. It is the group's fourth new business foray in three years, following its entry into paints, B2B e-commerce and jewellery retail.

Ultravolt will initially focus on wires and low-tension cables. The business is targeting more than one lakh retailers and plans to leverage over 5,000 UltraTech Building Solutions outlets along with its wider distribution network. It aims to cover more than 500 districts and 6,000 pin codes.

The business is being developed around UltraTech's existing presence in the construction ecosystem, allowing the company to extend its reach beyond cement into another part of the building-products market.

Copper prices add to pressure on cable makers

The selling in cable stocks also comes against a backdrop of elevated copper prices, which have increased input-cost pressure for manufacturers.

Polycab and Finolex Cables have implemented price increases on select products, while RR Kabel has announced hikes but has kept their implementation on hold, according to channel checks cited in the source material.

Finolex Cables has implemented a 3% increase on light-duty and communication cables from September 4. Polycab has raised prices by around 3% on selected 90-metre and 180-metre wires, with the revised prices effective from September 2.

RR Kabel has announced increases of 2% to 3.5% across products, although implementation has been put on hold. KEI Industries has not taken a price action so far.

The pricing decisions highlight the challenge for manufacturers: passing higher copper costs to customers can protect margins, but aggressive price increases can also affect demand and market share.

Cable stocks: What happens next?

UltraTech's entry adds a well-capitalised competitor to an already competitive market. For established companies, the key factors to watch will be pricing, dealer additions, capacity utilisation and the pace at which Ultravolt builds its distribution network.

The initial market reaction suggests investors are already factoring in a tougher competitive environment for the sector. The impact on individual companies, however, is likely to depend on their ability to protect margins while retaining market share as UltraTech scales up its new business.

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