Thu Feb 27 05:10:00 UTC 2025: ## UltraTech Cement’s Diversification into Wires and Cables Sends Shockwaves Through Sector

**Mumbai, India** – UltraTech Cement Ltd., India’s largest cement producer, announced its foray into the wires and cables (C&W) segment, triggering a significant market reaction on February 27th. The company plans to invest Rs 1,800 crore (approximately $218 million USD) over the next two years in a new plant in Bharuch, Gujarat, with operations slated to begin by December 2026.

This announcement caused a 4% drop in UltraTech Cement’s share price in early trading. The move also negatively impacted existing C&W players, with shares of KEI Industries and Polycab India plummeting by 17% and 14% respectively. Havells India and RR Kabel also experienced significant declines.

While some analysts, like Jefferies, view the dip as a buying opportunity for UltraTech Cement, others express concern. Citigroup noted that the diversification, though relatively small in scale, could dilute UltraTech’s image as a pure-play cement company. The Rs 1,800 crore investment represents about 13% of the company’s projected free cash flow over the next two years, but the new venture is expected to generate approximately Rs 1,200 crore in revenue, or about 14% of estimated FY27 revenue.

Nuvama Institutional Equities anticipates a modest impact on the C&W market, citing the sector’s fragmented nature and the presence of strong competitors. They maintain their positive outlook on KEI Industries, Polycab, and Havells.

The long-term effects of UltraTech Cement’s entry remain to be seen. While the company aims to leverage its existing customer base and manufacturing expertise, the success of its new venture will depend on navigating the complexities of the C&W market, including distribution channels and regulatory approvals. The market’s initial reaction highlights the uncertainty surrounding UltraTech Cement’s diversification strategy.

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