Rising copper and aluminium prices have pushed up the size of the industry itself, which gives room for a new large player to be absorbed without hurting existing companies, he added.
UltraTech has commissioned its wires and cables unit in Gujarat ahead of schedule, a move that had rattled cables and wires stocks on Dalal Street the previous day. Gori estimates UltraTech’s roughly ₹1,800 crore capital expenditure could generate ₹8,000-9,000 crore in revenue over the next four years, translating into an impact of close to 200 basis points, or 2 percentage points, on the existing industry.
“It won’t have a material impact,” he said, “but we believe any further announcements are probably something which can be a key thing to watch out for.”
That last point is the one investors are watching most closely. Gori flagged that UltraTech could still announce a fresh, larger capex plan focused on the cables segment specifically, having so far concentrated mainly on wires. He said a company of UltraTech’s scale would definitely be evaluating this big category in a more serious manner over the next two to three years, given the market opportunity in cables remains largely untapped by its current spend.
Diamond Power adds to the competitive picture
The concern isn’t limited to UltraTech. Diamond Power Infrastructure has also announced expansion plans targeting ₹8,000-9,000 crore in revenue over the coming years. Combined with UltraTech’s build-out, that could bring roughly ₹15,000-17,000 crore of new industry capacity on stream.
Gori said the two new entrants are likely to compete in different corners of the market. UltraTech’s wires business will largely draw share from India’s unorganised players, which he estimates hold about a fifth of that segment. Diamond Power, by contrast, operates in conductors and cables, where the presence of the unorganised market is very limited, meaning it competes more directly with established players.
Despite that, Gori pointed out that incumbents KEI Industries and Polycab remain confident of outgrowing the industry. “These companies have been very confident of growing 1.5 times the industry, despite all these announcements,” he said. Still, he cautioned, “it could have some impact on the sentiments, for sure.”
Should investors buy the dip?
Polycab, RR Kabel and KEI Industries all came under pressure in trading following news of UltraTech’s early commissioning. Asked whether the pullback is a buying opportunity, Gori was cautious rather than encouraging.
He noted that valuation multiples across the sector have already re-rated to near historical highs, leaving little cushion if operating performance disappoints. “Any uncertainty on the operational performance can definitely have some impact on the multiples,” he said. His view for now: “I wouldn’t be in a hurry to look at the stocks actively.”
For the full interview, watch the accompanying video
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