Polycab India Ltd, the largest player in India’s ₹1-trillion wires and cables industry, is willing to go “all out” to protect its market share, a top executive said days after the high-budget entry of the Aditya Birla Group into the sector caused a rout in share prices of leading incumbents.
“We will go all out to retain our market share,” Shashi Amin, the CEO of B2B channel & corporate communication at Polycab, told Mint in an exclusive interview.
The entry of well-funded new players has raised concerns that a price war could emerge, but Polycab believes the barriers to scaling up are higher than they appear. Amin said the company is closely tracking competitors’ pricing strategies, while pointing out that establishing a strong position in cables takes considerably longer than in wires.
Share shock
He dismissed the share price fall as a knee-jerk reaction.
Since Aditya Birla Group announced the commencement of commercial production at its wires and cables plant in Gujarat on 1 September, Polycab India’s shares have fallen 7%, underperforming the Nifty, which declined just 1% over the same period. Other market leaders such as RR Kabel Ltd, Havells India Ltd and KEI Industries Ltd have also lost around 5-20% in share price during this period.
Amin expects India’s wires and cables market to expand from just over ₹1 trillion during the year ended March 2026 to ₹1.5 trillion by 2030, led by demand from India’s expanding power grid and a booming real estate industry. There will therefore be enough demand in the market to accommodate new entrants, he said.
Moreover, Aditya Birla's UltraVolt’s focus is on wires that cater to the consumer sector rather than the heavy-duty cables that go into transmission grids. The former category accounts for less than a third of the overall market, he said.
“Unlike wires, where entry can be relatively easier, cables require approvals and pre-qualification from government agencies, utilities, consultants and contractors,” he said.
Capacity race
However, the new player is entering the market with significant capacity at a time when incumbents are also investing in expansion to meet anticipated demand growth. This could leave the industry with more capacity than demand can absorb in the near term, intensifying the fight for market share, especially in wires.
“There will be a bit of pressure on everybody as far as margins are concerned,” Amin said.
The Aditya Birla Group launched UltraVolt, its wires and cables business housed under UltraTech Cement Ltd, last week with an initial investment of ₹1,800 crore. The company is setting up a new manufacturing plant that equals a tenth of the market’s existing capacity, more than all the incumbents but Polycab.
Kumar Mangalam Birla, the conglomerate’s chairperson, has set an ambition for the new business to become one of India’s top two wires and cables sellers within five years.
Amin rejected the notion that having a leading copper and aluminium producer in Hindalco within the Aditya Birla Group will give UltraVolt any inherent advantage over competition.
“We had interactions with the top leadership of Hindalco on the subject. So assurance has been given that we would be treated at par with UltraVolt. So till such time, I don't think there's any issue,” he said.
Price pressure
A similar move by the Aditya Birla Group was seen earlier in 2024, when the conglomerate entered the paints market with the launch of Birla Opus, pledging to invest ₹10,000 crore in six greenfield plants and leading to a price war in the market. Opus, which is a subsidiary of the listed company Grasim Industries, aspires to break into the top tier of India’s paints industry.
Competition in India’s cables and wires space was on a clear uptick after the entry of UltraVolt as well as the resurgence of Diamond Power, according to analysts at brokerage JM Financial. Bajaj Electricals and Crompton are also looking to eat into the market with their wire aspirations, the brokerage noted in a report dated 1 September. Diamond Power is backed by the Adani Group.
“We believe that while growth opportunities within the segment do exist, Ultratech seems to be targeting the Western and Northern markets, which means head-to-head competition with the likes of Polycab and KEI. What worries us beyond revenue/market share loss is incumbents seeing their pricing power, and resultantly, margins being capped as Ultratech playing either the quality or pricing game could hurt industry-wide pricing discipline. With the brand recall that Ultratech enjoys, it may be too bold of us to assume absolutely no impact on incumbents” wrote JM analysts Shalin Choksy and Jignesh Thakur in their report.
Polycab has committed around ₹8,000 crore in capital expenditure over the next four years, compared with the roughly ₹1,800 crore investment planned by the Aditya Birla Group.
“For them, it's one time. For me, the similar investment will be for the next four years,” Amin said.
Polycab currently commands around 30-31% of the organised market, according to Amin. The organised segment accounts for about 70-72% of the overall industry, with the six largest players together accounting for roughly 60-63%.
Amin said the company is targeting a doubling of its 2025 base by 2030 and believes it could exceed that target ahead of schedule.
One of the biggest growth opportunities is expected to come from data centres, where Polycab has been building a presence for seven to eight years, he said. Every megawatt of data-centre capacity requires about ₹3.5 crore worth of wires and cables, according to Polycab’s estimates.