Thu Feb 27 07:20:00 UTC 2025: **UltraTech Cement’s Diversification into Wires and Cables Sends Shockwaves Through Indian Market**

MUMBAI, INDIA – UltraTech Cement Ltd., India’s leading cement producer, saw its shares plummet by six percent on February 27th, its largest single-day drop in three years, following the announcement of its foray into the wires and cables (C&W) sector. The company plans to invest ₹1,800 crore (approximately $218 million USD) over the next two years in a new plant in Bharuch, Gujarat, scheduled to be operational by December 2026.

This diversification move triggered a sell-off in the existing C&W sector. Shares of KEI Industries and Polycab India, major players in the industry, fell sharply by 17 percent and 14 percent respectively. Havells India and RR Kabel also experienced significant declines.

While UltraTech claims the expansion aligns with its strategy to become a comprehensive building solutions provider, analysts offer mixed reactions. Nuvama Institutional Equities believes the impact on the C&W market will be modest, citing the fragmented nature of the industry and UltraTech’s relatively late entry. They maintain their positive outlook on KEI Industries, Polycab, and Havells.

Conversely, Citigroup notes that UltraTech’s move, while relatively small in the overall context, might impact its image as a pure-play cement company. They also highlight the significant financial commitment, representing approximately 13 percent of the company’s projected free cash flow over the next two years. Jefferies, however, views the market reaction as an opportunity to buy UltraTech shares.

The news comes amidst the backdrop of India’s Largest Regional Retail Option Traders Summit (BOTS), organized by Traders Gurukul, highlighting the ongoing dynamism in India’s financial markets. The event, held on the 2nd or 3rd Sunday of each month in major Indian cities, provides a platform for options trading discussions and networking. This development underscores the evolving landscape of the Indian stock market and the ripple effects of major corporate decisions.

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