The entry of Aditya Birla Group’s flagship company, Ultratech Cement, into the cables and wires sector may impact existing players such as RR Kabel and Finolex Cables, according to  Harshit Kapadia, Vice President-Analyst at Elara Capital.

“If we get a sense from the Ultratech itself, then we get an intention of how aggressive they can come to the market and if they can disrupt the market or not and then we will probably relook at cable and wire segment,” he said.

UltraTech plans a capital expenditure of ₹1,800 crore over the next two years in the cables and wires segment as it aims to expand its presence in the construction value chain.

Their focus is likely to be more on wires than cables and therefore, companies like Polycab India and KEI Industries may see limited impact.

While the sector’s valuations have eased from 40 times to under 30 times FY27 estimated earnings, placing most players in a relatively comfortable zone, Kapadia believes further downside is likely as UltraTech’s strategy unfolds. He advises caution on the sector.

Read Here | UltraTech’s entry not a threat, market overreacting, says RR Kabel CFO

The pricing strategy and discounting approach adopted by UltraTech will play a key role in shaping the industry’s competitive dynamics.

With the domestic wires and cables market growing at 13-15% annually, existing players also have opportunities on the export front, which could help mitigate competitive pressures from UltraTech’s entry.

In the defence space, Elara Capital is positive on Bharat Electronics, Hindustan Aeronautics (HAL), and Bharat Dynamics led by their strong order inflows, execution capabilities, and stable margins.

Also Read | KEI Industries MD says UltraTech’s cables entry poses no threat as it will take years to scale