UltraTech Falls 5% On Wires & Cables Foray; Competitors KEI, Polycab, Havells Crash Up To 13% – News18
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UltraTech Cement shares dropped by 4.8% on the BSE in early trade following the company’s announcement of its entry into the wires and cables; Should you invest?
Cable Stocks Under Pressure
UltraTech Share Price: UltraTech Cement shares dropped by 4.8 per cent on the BSE in early trade, hitting a low of Rs 10,444, following the company’s announcement of its entry into the wires and cables sector. UltraTech plans to invest Rs 1,800 crore to set up a plant in Gujarat over the next two years, aiming to expand its presence in the construction value chain.
UltraTech Cement has announced plans to set up a plant near Bharuch, Gujarat, with an expected commissioning date of December 2026, as part of its expansion into the wires and cables sector. The company’s board approved the proposal on Tuesday to strengthen its position in the construction value chain through its Building Products Division.
This move aligns with UltraTech’s strategy to become a comprehensive Building Solutions provider, which was also reflected last year when the Aditya Birla Group launched the Birla Opus brand in the decorative paints sector.
The company aims to tap into the growing demand for wires and cables across residential, commercial, infrastructure, and industrial sectors. The wires and cables industry has seen a 13% revenue CAGR from FY19 to FY24, and with the ongoing shift from unorganised to organised markets, the sector presents significant growth potential for new, trusted players.
UltraTech believes this expansion will be value-accretive for its shareholders. Aditya Birla Group Chairman Kumar Mangalam Birla said the move aligns with the group’s vision of providing comprehensive solutions to the construction sector while continuing to focus on the core cement business. He added that UltraTech had recently surpassed 175 mtpa of cement capacity in India, underlining its commitment to delivering high-quality building materials.
As competition intensifies, particularly with Adani Group’s Ambuja Cement, UltraTech is expanding its cement capacity through acquisitions and enhancements.
According to Trendlyne, the average target price for UltraTech Cement shares is Rs 12,473, reflecting a potential upside of 14% from current levels. 39 analysts have a consensus ‘Buy’ recommendation for the stock.
Meanwhile, shares of major cables and wires companies experienced significant selling pressure on February 27. Polycab India, the largest cables and wires company in India, hit the 10 per cent lower circuit, falling to Rs 5,189 per share. KEI Industries also saw its shares locked in a 10 per cent lower circuit, while Havells India dropped 9 per cent to Rs 1,140 per share. Additionally, R R Kabel shares plunged by 13 per cent, reaching an all-time low of Rs 965.60 per share.
