Wires & cables face a new challenge: How Ultravolt’s big push could reshape India’s cable market

For years, India’s wires and cables industry has been on a strong growth trajectory, supported by rising electrification, infrastructure spending and housing demand. UltraTech Cement is now testing that narrative, with its Rs.1,800-crore venture Ultravolt foraying into the segment. The move has sparked concerns over intensifying competition and potential pressure on market share and profitability.

Since Ultravolt’s launch on 3 September, shares of the three biggest listed players (in terms of market capitalisation) Polycab India, KEI Industries and RR Kabel have fallen by 7.5%, 15.5% and 9%, respectively. This reflects concerns over how the incumbent players will respond to a well-funded new entrant with nationwide ambitions. KEI and Polycab did not reply to comments sought by ET Wealth till press time.

Yet, demand from power transmission and distribution, renewable energy, data centres, electric vehicles and real estate continues to augur well for the industry. Brokerage reports from Centrum Broking, Nirmal Bang and UBS acknowledge the competition Ultravolt poses, but remain largely constructive on the sector in the long term.

Serious challenger

UltraTech’s entry into the wires and cables market is more than just another diversification move. The Aditya Birla Group company has openly stated its ambition to become one of the industry’s top two players within five years. What makes Ultravolt a credible threat is the strength it brings from day one: a nationwide distribution and supply chain network, deep financial resources, and a willingness to invest heavily in branding and marketing.

As per Centrum Broking, Ultravolt has built a strong market-entry strategy in just 18 months. Its pricing and incentive structures for distributors and dealers are reportedly more attractive than established rivals. It is also rolling out support programmes for retailers and electricians, including training, incentives, insurance and rewards.

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UBS, too, believes that Ultravolt’s strengths will lie in its ability to quickly expand distribution, ensure widespread product availability, build a strong brand that drives consumer pull, and execute an effective influencer engagement strategy.

Given the vital role retailers and electricians play in influencing customer purchases, analysts believe Ultravolt’s combination of brand-building and channel engagement could help it gain traction quickly.

Where will the impact be felt first?

Ultravolt’s entry is unlikely to disrupt the entire wires and cables industry at once.

At least initially, it is expected to focus on house wires and light-duty cables, making the residential segment the obvious battle ground. It is likely to gradually expand into high-tension (HT) and extra-high voltage (EHV) cables, but the immediate challenge will be to win share in the household wires market. That could put companies with a large presence in this segment under greater pressure than others. Ultravolt could capture up to 15% market share in household wires and cables by 2030-31, as per Nirmal Bang.

If that happens, the incumbents may have to work harder to hold on to their distributors, dealers and customers. For existing players, margins matter more than market share. According to Centrum Broking analysts, they may need to offer higher dealer incentives and adopt more aggressive pricing strategies to defend their positions. This could raise costs at a time when copper prices remain volatile. Centrum estimates operating margins could fall by 15-75 basis points, depending on company’s exposure to the wires business.

Ashwini Shami, President and Chief Portfolio Manager, OmniScience Capital, believes margin pressure arising from increased competition and input-cost volatility is a bigger risk than volume loss. UltraTech’s extensive distribution network, along with higher dealer margins and aggressive marketing, could ramp up competitive pressures.

That said, some analysts argue the threat may not be immediate. With 20-25% of the house wires market still unorganised, Ultravolt has significant room to grow by converting consumers from unbranded products rather than directly taking share from listed players. However, JM Financial cautions it may be unrealistic to assume a well-funded entrant will limit itself to the unorganised segment. As competition grows, pricing discipline across the industry could weaken, putting more pressure on established players.

Outlook for other segments

The competition that Ultravolt brings is unlikely to be evenly spread across the industry. With its initial focus expected to be on house wires, manufacturers with a larger presence in medium-voltage (MV) and EHV cables may not feel the heat immediately.

That’s because these segments have very different dynamics. House wires are relatively simpler to manufacture, and success often depends on factors such as brand recall, pricing, distribution strength, and relationships with electricians, contractors and retailers.

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The MV and EHV cable segments, however, are far more specialised. They require advanced manufacturing capabilities, sophisticated testing facilities and a host of approvals from utilities and other large customers. Building credibility and winning orders in these segments typically takes time. As a result, even a well-funded entrant may struggle to scale up quickly in this higher-end market. This gives incumbents with strong positions in MV and EHV cables some breathing room.

Long-term growth story intact

While Ultravolt’s entry has raised competitive concerns, analysts remain positive about the sector’s long-term prospects. Demand for wires and cables continues to be driven by structural themes such as power transmission and distribution, renewable energy, data centres, real estate, railways, electric vehicles and semiconductor manufacturing.

The growth runway remains significant. India’s wires and cables market could expand from Rs.1.1 lakh crore in 2025-26 to nearly Rs.1.6 lakh crore by 2028-29, at a 13% compound annual growth rate, estimates Centrum.

Opportunities also extend beyond the domestic market. As per a UBS report, the global cable industry is in a strong upcycle, supported by grid modernisation, renewable energy integration and rising investments in data centres. At the same time, Indian manufacturers are steadily expanding their export footprint, helping diversify revenue streams and reduce dependence on the domestic market. In short, while Ultravolt may alter the competitive landscape, the industry’s underlying growth story remains firmly intact.

Approaching the segment

Analysts say investors should avoid treating the wires and cables space as a single, uniform industry. Instead, companies should be evaluated based on their exposure to different cable categories and end markets.

“Investors should avoid viewing cables and wires as a homogeneous industry,” says Nishant Bagrecha, Analyst, InCred Equities. He recommends companies with greater exposure to MV and EHV cables, transmission and distribution projects, renewable energy and other specialised applications, where entry barriers are higher.

Valuations also deserve attention. While sector stocks have corrected recently, Bagrecha believes much of the concern around Ultravolt’s entry is already priced in. Any further derating, he argues, is likely to be company-specific depending on evidence of actual impact on realisations, margins and market share. For investors, the focus should thus be on individual fundamentals rather than the broader industry narrative. It is important to monitor how effectively companies navigate the evolving competitive landscape.

Top 3 picks

Company-wise impact

Here’s how the three biggest players are placed:

Polycab India: Analysts believe that the company’s strong distribution reach, indus try leading margins will help in managing competitive pressures. Scale up of capex in the EHV segment is another positive.

KEI Industries: Strong capex pipeline, capacity ramp up of the Sanand plant, and export potential are expected to support performance in the future. Also, its portfolio towards MV, HT and specialized Cables will limit product overlap with Ultravolt.

RR Kabel: Highest risk due to heavy retail exposure and will have more overlap with Ultravolt portfolio. However, export opportunities and focus on expanding cable capacities will help mitigate competitive pressures.