Polycab, KEI Industries shares crash up to 9% after UltraTech Cement enters wires & cables business. What Jefferies, Nuvama expect

Shares of Polycab and KEI Industries crashed up to 9% on Friday after UltraTech Cement announced the launch of its wires and cables business, Ultravolt, backed by an investment of Rs 1,800 crore, with brokerages warning of a de-rating following the Aditya Birla Group’s aggressive foray into the market.

After the launch, UltraTech Cement shares gained around 1%, but Polycab shares plunged around 6% to trade at Rs 8,300 apiece on NSE, while those of KEI Industries crashed 9% to Rs 4,848.50 apiece.

Housed under UltraTech Cement, Ultravolt will debut as the second-largest player in the wires segment by capacity, according to the group. The business aims to build a national brand and become one of the top two players in the segment within five years. This marks the group’s fourth new business entry in three years.


“Wires and cables are becoming central to India's next phase of development. They sit at the intersection of three mega trends in the Indian economy: urbanisation, electrification and digitisation,” Aditya Birla Group Chairman Kumar Mangalam Birla said. Ultravolt plans to reach more than one lakh retailers and expand availability through over 5,000 UltraTech Building Solutions (UBS) outlets. Its initial rollout will cover more than 500 districts and 6,000 pin codes.

The company said it has a network of more than 20 warehouses and will leverage UltraTech’s relationships with individual home builders, contractors, real-estate developers and EPC companies, along with its pan-India distribution footprint.

The business will begin with a new manufacturing facility at Jhagadia in Gujarat’s Bharuch district. Ultravolt CEO Sriram Rangarajan said the company will initially offer home wires, flexible wires and cables for residential, commercial, industrial and infrastructure applications. It plans to expand into a broader range of electrical accessories over time.

UltraTech’s entry into the wires and cables market expands its participation in the construction value chain beyond grey cement, ready-mix concrete, building products and white cement. The move is part of its stated Building Solutions strategy and is aimed at increasing its participation in opportunities around home building, infrastructure and electrification.

Also read | Aditya Birla Group launches Ultravolt with Rs 1,800 crore bet, debuts as India’s No. 2 wires player by capacity

Nuvama on UltraTech’s foray into cable & wire space

Nuvama Institutional Equities said UltraTech Cement’s aggressive foray into the business may hurt the existing cables and wires players in the near term. While the company’s formal wires and cables launch under the Ultravolt brand was expected, its ambition of becoming one of the top two C&W players and the second-largest wires player by capacity is a significant new announcement, which implies aggressive posturing in terms of capacity additions, portfolio and distribution expansion and could likely drive interim de-rating for the C&W industry, Nuvama said.

Notwithstanding this, Nuvama believes the C&W sector is well poised for healthy revenue and PAT growth in the near term, as well as in the medium term. Polycab and KEI Industries remain the brokerages’ top picks.

Jefferies on UltraTech Cement share price

Jefferies noted that Ultravolt marks UltraTech Cement’s entry into wires & cables business just 18 months after the announcement. The positioning appears more aggressive than initially envisaged, also tallying with Grasim’s rollout in paints, while also extending UltraTech Cement's Building Solutions play, it added.

At scale, the foray into the new business could add 3-7% of UltraTech Cement's FY30 revenue and EBITDA, the international brokerage said. It has a ‘Buy’ call on the stock with a target price of Rs 14,065 apiece, implying 24% upside potential.

Motilal Oswal on UltraTech Cement share price

Motilal Oswal Financial Services noted that UltraTech Cement’s entry into the cables and wires business is strategically significant, given the group’s ability to deploy capital, build distribution and leverage its established relationships across the construction ecosystem.

Its ambition of becoming the No. 2 player within five years suggests that Ultravolt is likely to adopt an aggressive strategy for capacity ramp-up, distribution expansion and brand building, similar to the group’s approach during the initial years of its paint business, the domestic brokerage noted.

However, there could be near-term pressure on C&W stocks due to UltraTech Cement’s ambitious target of becoming the No. 2 brand, though the industry’s underlying demand outlook remains constructive, it added. Motilal Oswal has a ‘Buy’ call on shares of UltraTech Cement with a target price of Rs 13,800 apiece, implying 22% upside potential.

Also read |Birla built India with cement, now it wants to wire up what powers it with a ₹1,800 crore bet

(With inputs from agencies)

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