Cable Sector Shake-Up: Adani’s Market Entry Sends Polycab, KEI, Havells Stocks Spiraling

Shares of leading cable and wire manufacturers, including Polycab India, KEI Industries, and Havells, faced significant pressure on Thursday, March 20, as Adani Group’s entry into the cables and wires sector triggered a sharp sell-off. The heightened competition, combined with rising raw material costs, has created a challenging environment for existing players in the market.

Adani Enterprises announced its entry into the cables and wires segment through a joint venture between its wholly-owned subsidiary Kutch Copper Limited (KCL) and Praneetha Ventures. This strategic move is expected to disrupt the competitive landscape, with industry experts anticipating increased pressure on pricing and market share among established manufacturers.

The sell-off comes just weeks after UltraTech Cement announced its plans to enter the cables and wires industry, adding to the growing concerns over market saturation and intensified competition. The dual entry of two major industrial giants into the sector is seen as a game-changer, with potential long-term implications for profitability and market dynamics.

Adding to the pressure, the recent surge in copper and aluminum prices has compounded the challenges for cable manufacturers. Copper and aluminum are essential raw materials in cable production, and their rising costs have pushed production expenses to multi-month highs. This increase in input costs is expected to squeeze profit margins, forcing companies to either absorb the higher expenses or pass them on to consumers, which could impact demand.

Market analysts believe that the entry of the Adani Group will increase competitive pressures, potentially leading to pricing adjustments and strategic shifts within the sector. The cables and wires segment, which has seen steady growth in recent years due to rising infrastructure and construction activities, now faces an uncertain phase as established players brace for intensified competition and fluctuating production costs.

The market reaction was swift, with shares of Polycab India, KEI Industries, and Havells declining sharply during intraday trading. The sell-off reflects investor concerns over the changing market dynamics and the potential impact on future earnings and market positioning. While the long-term consequences of Adani’s entry remain to be seen, the immediate market response underscores the significant shift underway in the cables and wires industry.

Adani Group Enters Cables & Wires Market Through Joint Venture, Polycab, KEI, and Havells Shares Slide

The Adani Group has taken a significant step into the cables and wires industry with the formation of a new joint venture, intensifying competition in the sector and triggering a sharp decline in the share prices of key market players. On Wednesday, Adani Enterprises announced that its wholly-owned subsidiary, Kutch Copper Limited (KCL), has successfully incorporated a joint venture company named Praneetha Ecocables Limited (PEL) in partnership with Praneetha Ventures Private Limited. The incorporation was completed on March 19, 2025, with KCL holding a 50% stake in the new entity.

Praneetha Ecocables Limited will focus on the manufacturing, marketing, and distribution of a range of metal products, including cables and wires. This strategic move marks Adani’s formal entry into the cables and wires segment, positioning the group as a direct competitor to established players like Polycab, KEI, and Havells. The development comes on the heels of the Birla Group’s recent foray into the sector through UltraTech Cement, which announced its entry last month. The entry of two major industrial conglomerates in quick succession is expected to reshape the competitive landscape of the cables and wires market, leading to increased pricing pressures and strategic shifts among existing players.

The financial markets reacted swiftly to the news. Shares of KEI Industries faced the steepest decline, crashing 10% to settle at ₹3,000 per share. Polycab India, the largest cables and wires manufacturer in the country, also saw its stock fall by 7.6%, closing at ₹5,021 per share. Havells India shares dropped 5.5%, ending the session at ₹1,472 per share. Meanwhile, shares of R R Kabel were not spared from the selling pressure, slipping 4.25% to ₹878.20 per share.

The growing competition comes at a time when the cables and wires industry is already grappling with rising input costs. The prices of key raw materials like copper and aluminum have surged to multi-month highs, adding to the operational challenges for manufacturers. Since copper and aluminum form a significant portion of production costs, the increase in their prices is expected to compress profit margins and put additional pressure on pricing strategies.

Industry experts believe that Adani’s entry into the cables and wires sector through Praneetha Ecocables Limited will likely disrupt the existing market dynamics. Established players may need to adjust their pricing models and enhance operational efficiencies to remain competitive. Furthermore, the entry of two heavyweight conglomerates within a short span is expected to trigger strategic shifts, including potential consolidation and innovation in product offerings, as companies seek to maintain market share and profitability.

While the long-term impact of Adani’s entry remains to be seen, the immediate market response reflects investor uncertainty over the heightened competition and its potential to erode margins and affect growth prospects in the cables and wires segment.

Analysts Cautious on Long-Term Impact of Adani and Birla Group’s Entry into Cables & Wires Sector

Despite the sharp market reaction following the entry of the Adani Group and the Birla Group into the cables and wires (C&W) sector, analysts remain measured in their outlook regarding the financial impact on existing players. Industry experts believe that while the immediate market response has been negative, the actual effect on the earnings of established cables and wires manufacturers such as Polycab, KEI Industries, Havells, and R R Kabel is expected to be limited in the near term.

Analysts suggest that the earnings of major C&W companies for the period between FY25 and FY28 are unlikely to face significant pressure from the new competition. This is because the cables and wires market is characterized by high entry barriers and strong brand loyalty, which give existing players an edge in terms of market positioning and customer retention. Moreover, established companies have well-developed supply chains, technological expertise, and distribution networks that may help them withstand competitive pressures in the short to medium term.

However, industry observers remain cautious about the longer-term outlook. They will be closely monitoring any strategic announcements or expansion plans from Adani and the Birla Group that could alter the demand-supply balance in the sector. If either of the new entrants adopts aggressive pricing strategies, introduces innovative product offerings, or invests heavily in capacity expansion, it could intensify competitive pressure and potentially impact the market share and profitability of existing players over the long run.

Furthermore, the entry of two large conglomerates into the sector may lead to a shift in market dynamics, particularly in terms of pricing and production capacity. If Adani and the Birla Group leverage their financial strength and operational scale to offer competitive pricing or improve product quality, established manufacturers could be forced to adapt by enhancing their product lines or optimizing their cost structures.

In summary, while the near-term financial performance of existing C&W players may remain relatively unaffected, analysts are preparing for a potentially more competitive environment in the years to come. The strategic moves and operational focus of Adani and the Birla Group will be key factors influencing the future trajectory of the cables and wires industry.

Copper Prices Surge Past $10,000 Per Ton Amid Supply Concerns and US Trade Policy Uncertainty

Copper prices have soared past the $10,000 per ton mark on the London Metal Exchange (LME), reaching levels not seen since October. This significant rally reflects growing supply concerns and increased buying activity, driven in part by shifting trade policies and geopolitical uncertainties.

The latest surge comes in response to a directive from former President Donald Trump, who recently instructed the US Commerce Department to investigate the potential imposition of trade levies on copper imports. Trump’s directive, which cites national security concerns, has sparked uncertainty in the global copper market, prompting traders and manufacturers to secure supplies in anticipation of potential trade barriers and price volatility.

Since the beginning of the year, copper prices on the LME have climbed 14%, reflecting strong demand and tightening supply conditions. However, this increase trails the more aggressive rally seen in the New York copper futures market, where prices have surged by 26% over the same period, approaching record highs. The divergence between the LME and New York futures markets highlights differing market dynamics and investor sentiment across regions.

The prospect of US tariffs on copper imports has added a layer of complexity to an already tight market. Copper is a critical industrial metal used extensively in construction, electronics, and the renewable energy sector. Any disruption to supply chains or increased costs due to trade restrictions could further strain global copper availability and push prices higher.

Market participants have responded to the uncertainty by increasing purchases of refined copper, contributing to the upward price momentum. Traders appear to be hedging against potential supply disruptions and higher costs that could result from US trade policy changes.

The rally in copper prices also reflects broader supply challenges. Ongoing issues at major copper-producing mines, along with logistical bottlenecks and labor disputes, have constrained production levels. Additionally, the transition to renewable energy and growing demand for electric vehicles (EVs) have increased the long-term structural demand for copper, adding upward pressure on prices.

Analysts are closely watching developments around the US Commerce Department’s investigation and any follow-up actions that could affect the global copper trade. If tariffs are imposed, they could alter supply patterns and lead to further volatility in copper prices. However, the immediate price surge underscores the sensitivity of the copper market to policy changes and supply-demand shifts.

While the long-term impact of Trump’s directive remains uncertain, the sharp rise in copper prices signals that market participants are bracing for potential disruptions and higher costs in the months ahead.

The widening price gap between copper prices on the London Metal Exchange (LME) and New York futures has created a strong incentive for traders and producers to redirect copper supplies to the US in anticipation of possible tariffs, according to a report by Bloomberg. The prospect of trade restrictions has added urgency to these moves, as market participants seek to capitalize on the price disparity and avoid potential cost increases.

Analysts highlight that copper is a key input in the cables and wires industry, accounting for approximately 55% to 60% of total raw material costs. This makes the sector highly sensitive to changes in copper prices, with any upward movement in copper costs having a direct impact on production expenses and profit margins. In addition to copper, aluminum is another critical raw material for the cables and wires industry, representing around 15% to 20% of input costs. As a result, fluctuations in both copper and aluminum prices can significantly influence the overall production costs and pricing strategies of cable manufacturers.

Copper and aluminum together account for nearly 75% of the total raw material costs in the cables and wires industry, underscoring the sector’s vulnerability to fluctuations in the prices of these key metals. Given their significant share in production expenses, any rise in copper or aluminum costs can have a direct and substantial impact on the profitability and pricing strategies of cable manufacturers.

Adding to the pressure, former President Donald Trump has already imposed a 25% tariff on steel and aluminum imports, affecting major trading partners such as Canada, Mexico, and China. These tariffs have raised production costs for manufacturers relying on imported metals and have introduced new complexities into global supply chains. Furthermore, Trump has pledged to implement broad “reciprocal” tariffs starting next month, which could extend to other key materials, including copper and related products.

The threat of new trade barriers has increased uncertainty for manufacturers and traders, prompting strategic adjustments to sourcing and production plans. If additional tariffs are imposed, they could drive up input costs even further, potentially affecting the global competitiveness of cable and wire manufacturers. The combination of rising raw material prices and heightened trade tensions is creating a challenging environment for the cables and wires industry, forcing companies to carefully navigate evolving market conditions.