India’s cable and wire makers are entering a period of change. More than a year after two large conglomerates announced plans to enter the business, it is now show time for the new entrants — UltraTech Cement and Kutch Copper.

The timing is notable. The industry is coming off several years of strong growth, driven by power, railways and real estate, and is expected to become a Rs 1.2 trillion market by the end of the current financial year. Demand remains robust, and companies continue to invest aggressively in capacity. But as new entrants prepare to enter the market, industry executives and analysts expect competition to increase.

The impact on profitability, according to them, is likely to remain limited for now. What may gradually come under pressure, however, is the pricing power that incumbents have enjoyed.

Industry analysts are estimating a near 20% increase in capacity by the end of FY27, including both incumbent expansions and additions from new entrants. That exceeds the expected 10% growth in volumes during the same period.

The mismatch does not immediately point to a profitability shock. New businesses require time to stabilise and build distribution channels.

However, over the longer term, analysts expect the market to become more competitive, potentially changing how prices are passed through to customers.

Everyone Wants A Piece

The growth trajectory of India’s cable and wire makers is difficult to ignore.

According to a recent Crisil report, volumes in the industry have grown at a compound annual growth rate of more than 15% over the last five years. Capital expenditure tied to rapid digitisation, increasing urbanisation, and rising power demand has driven this expansion.

The next phase of growth is also expected to remain intact, supported by demand from data centres and green energy-related industries.

The momentum has encouraged incumbent players to step up investments as well. Market leader Polycab India has a planned capex programme of Rs 6,000-8,000 crore over the next five years.

This has also been the backdrop for the entry of the two large business groups, KM Birla’s UltraTech Cement and Gautam Adani’s Kutch Copper.

For UltraTech, the move expands its building solutions portfolio in a market where it already sells cement. For the Adani Group, the business fits into a broader value-chain strategy, serving as a front-end value addition for the copper business and a back-end addition within the power sector ecosystem.

The announcements had an immediate impact on markets.

The month of March in 2025 was a volatile one for cable and wire stocks. Following the announcements from the two conglomerates, several stocks in the sector declined by close to 15%.

Most of those stocks have since recovered.

The initial reaction reflected investor concerns that a high-growth sector was preparing for a more competitive phase.

A Capacity Build-Up Begins

The next big question for the industry is about how much capacity growth will actually happen. Mohit Makhija, senior director at Crisil, notes that estimating industry capacities remains difficult because of the large unorganised presence in the market.

However, for the organised segment, he said, “Existing players are expected to add capacities by an estimated 10-12% of their capacities by the end of this fiscal. New entrants are also adding to capacities which are expected to get commissioned in the second half of the fiscal, taking total additional capacities to ~ 20-22% of existing capacities of organised players.”

Industry expectations suggest these capacities may begin coming on stream during the current fiscal year.

Of the two entrants, at least one appears set to begin operations within that period.

Executives from UltraTech Cement informed analysts that the company plans to launch its cables and wire business before December this year. News reports have also stated that the company has made multiple key appointments for the business.

Adani Enterprises, which houses Kutch Copper, has remained more guarded regarding its plans.

The company’s latest investor presentation does not mention the cables business under Kutch Copper. However, Adani had entered into a partnership with Praneetha Ventures in early 2025 to establish the business.

Praneetha Ventures stated on its website that it laid the foundation for its wires and cables manufacturing business near Ahmedabad in September 2025, although no timeline was shared.

An email query sent to UltraTech Cement and Adani Enterprises remained unanswered. The Core will update the story as and when there is a response.

The arrival of these capacities has raised questions around whether an industry that has enjoyed healthy growth can absorb new supply without sacrificing margins.

For now, executives and analysts appear relatively comfortable with the answer.

Why Incumbents Are Not Panicking

Industry executives and analysts point out that the competitive impact may be narrower than market reactions initially suggested.

One reason is the distinction between wires and cables.

Makhija said that the wires business contributes only around a quarter of the broader cables and wires industry.

He added, “Although the capacities are expected to be commissioned during fiscal 2027, players will require time to establish distribution channels and brand presence limiting the impact this fiscal.”

Building distribution networks and creating brand presence can take time, limiting the speed at which new entrants gain market share.

Executives at Apar Industries expressed a similar view in discussions with analysts.

They expect UltraTech and Kutch Copper to initially focus on wires and light-duty cable products.

“To some extent, you may lose a percentage or so in EBITDA here or there. But the overall size of the pie will continue to grow,” the executive added.

The broader argument from industry participants is that demand itself remains large enough to absorb additional competition.

Even if market shares shift at the margin, the sector is expected to continue growing.

A West Asia Interruption

Competition, however, is not the only challenge confronting manufacturers.

The cable and wire industry is also navigating cost pressures arising from the West Asia conflict.

According to a Crisil report, copper and aluminium prices rose 22-27%, while prices of polyvinyl chloride (PVC), another important raw material, increased by around 12% over the previous fiscal year.

These increases led to expectations of price hikes as manufacturers attempted to pass on higher costs to customers.

Some of these pressures have eased after the announcement of a peace deal, although supply-side concerns could continue.

PVC supplies face a direct impact because the material is derived from petroleum, much of which India imports through the Strait of Hormuz.

For metals such as aluminium and copper, the effect has been more sentiment-driven.

While India produces most of its aluminium domestically, pricing remains benchmarked to LME rates. Copper prices also rose during the West Asia conflict as defence demand and stocking added to already elevated demand from technology and energy industries.

Executives at Finolex Industries informed analysts that by the end of the fourth quarter, the impact from West Asia had increased costs across the board.

“...left with the higher cost of production than before and therefore, margins were slightly under pressure.”

Despite the rise in costs, manufacturers are expected to manage FY27 largely through price pass-through mechanisms.

Analysts at Motilal Oswal, in a report on RR Kabel, noted, “While Middle East disruptions may continue to impact 1QFY27, diversified exports and domestic demand are expected to partly offset the impact.”

But that ability to immediately pass through costs may itself become a point of change as competition increases.

Makhija believes there will be a shift in pricing behaviour over time.

“The practice of passing on commodity price (copper and aluminium) increases to end customers immediately through monthly/bi-monthly resets might undergo some change and hikes might become more calibrated in nature owing to increased competition,” he said.

For incumbents, the risk may not be an immediate hit to profits. The bigger shift may emerge more gradually.

What is at stake is the pricing freedom the incumbents in the industry have long enjoyed.