Thu Feb 27 05:10:00 UTC 2025: ## UltraTech’s Entry into Cables & Wires Market Sends Shockwaves Through Sector

**Mumbai, India** – UltraTech Cement Ltd.’s foray into the cables and wires (C&W) industry has triggered a significant sell-off in the sector, with shares of major players experiencing declines of 5% to 20% on Thursday. The ₹1,800 crore (approximately $218 million USD) investment over the next two years, including a new plant near Bharuch, Gujarat, scheduled to open by December 2026, has raised concerns about increased competition and potential margin erosion.

Analysts are drawing parallels to the paints industry, where the entry of new players, including Grasim, significantly impacted incumbent valuations. While the immediate impact on C&W companies’ profitability is expected to be minimal, the longer-term outlook is less certain. The fragmented nature of the C&W market, unlike the oligopolistic paints industry, could hinder UltraTech’s market share gains, particularly as existing players are already expanding capacity. However, the potential for UltraTech to capture market share from unorganized players remains a key factor.

Jefferies India estimates UltraTech could achieve 5-7% of the C&W market by FY29, a market projected to reach ₹1.3 trillion (approximately $158 billion USD). The impact is anticipated to vary across companies, with business-to-business (B2B) players like Polycab potentially less affected than business-to-consumer (B2C) focused companies like Finolex or Havells.

UltraTech’s stock itself fell by approximately 5% on Thursday, reflecting investor uncertainty about the company’s capital allocation strategy. While the C&W investment represents only about 10% of its annual capex guidance, it raises questions about future investment priorities and could deter investors solely focused on the cement sector. The potential for aggressive pricing by UltraTech also poses a threat to existing players’ profit margins. The long-term success of UltraTech’s venture hinges on its ability to rapidly scale up manufacturing and distribution.

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