Shares of leading wires and cables companies experienced significant declines on Tuesday, September 1, following UltraTech Cement's commercial production launch at its Jhagadia facility in Gujarat. According to reports from CNBC TV18, KEI Industries shares fell 6% to ₹5,398.5, while Polycab India dropped 4.7% to ₹9,000 and Havells India declined 1.8% to ₹1,221.3. The market reaction reflects investor concerns about intensified competition from India's largest cement company entering the wires and cables segment. However, the broader metal sector faced additional pressure as Nifty Metal fell nearly 3% with all constituents trading lower, while Hindustan Zinc and National Aluminium Co. fell 3-4%. As per Informist Media reports, the decline was attributed to bullion prices falling after US Federal Reserve Chairman Kevin Warsh's speech at Jackson Hole Symposium, where he hinted at the possibility of interest rate hikes.
The UltraTech Cement facility at Jhagadia has commenced commercial production ahead of its earlier targeted commissioning timeline of December 2026. As reported by CNBC TV18, the facility has an installed capacity of 10.98 lakh kilometres for house wires and light-duty cables. The plant's strategic location in Gujarat provides proximity to key raw materials, particularly copper, which is expected to support operational efficiency. The company had initially announced its entry into the wires and cables business in February 2025 with a planned investment of around ₹1,800 crore over two years. According to CNBC TV18 reports, UltraTech had committed approximately ₹888 crore of its planned capex as of June 2026. The commercial production launch came after the company indicated during its Q1FY27 earnings call that the wires and cables business would be launched in Q3FY27.
According to Equirus Securities' Manoj Gori, the market has moved past its initial nervousness over UltraTech's entry into the wires and cables business. Gori estimates that 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. However, he emphasized that "it won't have a material impact" and noted that 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. The analyst also flagged that UltraTech could still announce a fresh, larger capex plan focused on the cables segment specifically, having so far concentrated mainly on wires.
The competitive picture extends beyond UltraTech, as 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. According to Gori, 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, while Diamond Power operates in conductors and cables, where the presence of the unorganised market is very limited, meaning it competes more directly with established players. Despite the new competition, Gori noted that incumbents KEI Industries and Polycab remain confident of outgrowing the industry, with these companies having been very confident of growing 1.5 times the industry despite all these announcements.
Despite the recent decline, KEI Industries stock remains up 20% year-to-date, while Polycab is still up 17% in 2026 according to CNBC TV18 reports. Havells India has underperformed its peers, declining 14% year-to-date. On the positive side, UltraTech Cement shares traded 0.4% higher at ₹11,500 on Tuesday, though the stock is down 3.5% year-to-date. However, Equirus Securities' Gori was cautious about buying opportunities, noting 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, adding that "I wouldn't be in a hurry to look at the stocks actively."
