Shares of Polycab India were trading 1.27% lower at ₹8,194.50, while RR Kabel fell 3.39% to ₹2,368 and KEI Industries declined 3.31% to ₹4,689.50 on Monday. Over the past one week, RR Kabel has fallen more than 19%, KEI Industries nearly 15%, and Polycab about 10%.
The week starting August 31 also marked the worst-performing week for cable and wire stocks since February 2025.
According to brokerage firm Citi, UltraTech’s entry could result in higher disruption in the wires category compared with cables. It noted that RR Kabel and Havells have higher exposure to wires compared to Polycab.
The concerns around competition come after UltraTech commissioned its wires and cables unit in Gujarat ahead of schedule last week. The development had triggered a sharp sell-off in C&W stocks on September 2.
JM Financial cuts ratings
Also on September 2, JM Financial downgraded Polycab and KEI Industries to ‘Add’ from ‘Buy’ and RR Kabel to ‘Reduce’ from ‘Add’, citing concerns around the absence of volume growth and potential new competition.
The brokerage said the key question for the sector is whether the market is underestimating new competition. It estimates UltraTech and Diamond Power could cumulatively generate ₹17,000 crore in revenue by FY29, translating into 11–12% of the total market share.
JM Financial estimates the Indian C&W industry could be worth ₹1.52 lakh crore by FY29, implying a 15% CAGR. Adjusting for new competition, it sees the market at ₹1.35 lakh crore, implying a 10.5% CAGR for FY26-29.
The brokerage also said C&W stocks were trading at a 4–5% premium to their five-year average P/E and a 25% premium to their long-term average. It identified Polycab as most susceptible to tapering growth and peaking margins, followed by RR Kabel and KEI Industries.
What investors are watching
Equirus Securities had said last week that the market had moved past its initial nervousness over UltraTech’s entry, with strong volume growth in the overall wires and cables space potentially allowing the new player to be absorbed without materially hurting incumbents.
However, Equirus flagged the possibility of further capex by UltraTech focused specifically on cables as a key factor to watch. It also noted that Diamond Power’s expansion plans add to the competitive landscape, with the two companies together potentially bringing ₹15,000–17,000 crore of new industry capacity over the coming years.
Equirus had also cautioned that valuations across the sector had re-rated towards historical highs, leaving limited cushion if operating performance disappoints.
