Shares of wires and cables companies came under sharp selling pressure on September 4 after UltraTech Cement launched its Ultravolt wires and cables business, intensifying competitive concerns in a segment dominated by established players such as Polycab India, KEI Industries and RR Kabel. The sell-off in the wire and cable stocks followed UltraTech Cement‘s entry with a planned Rs 1,800 crore investment in the new business. 

The launch also comes with an aggressive ambition. UltraTech is targeting a top-two position in wires and low-tension cables within five years, while Jefferies believes the new business could contribute around 3-7% of UltraTech’s FY30 revenue and EBITDA once it reaches scale. The other brokerages too maintained a positive rating on the stock. 

Jefferies: Ultravolt could add a new earnings stream

Jefferies said UltraTech’s entry into wires and cables came just 18 months after the initial announcement, with commercial production at Bharuch in Gujarat starting ahead of schedule. The initial focus is on wires and low-tension cables, backed by an investment of around Rs 1,800 crore.

The brokerage estimates that the business could generate around Rs 1,000 crore of revenue by FY30-FY31, assuming asset turns of 4-5 times and EBITDA margins of 10-12%. At scale, this could contribute around 3-7% of UltraTech’s FY30 revenue and EBITDA, although Jefferies has not yet factored the opportunity into its estimates. 

UltraTech plans to launch Ultravolt across more than 500 districts and 6,000 pincodes, using its existing network of more than 5,000 UltraTech Building Solutions outlets and over 20 warehouses. Jefferies said the company’s dealer relationships and engagement with contractors, builders and developers could provide a ready platform for faster market penetration than a typical new entrant. 

ALSO READ

The initial portfolio includes home wires, flexible wires and light-duty cables, with the company focusing on residential demand. UltraTech also plans to expand into other electrical products such as wire conduits over time.

UltraTech builds electrician network alongside distribution

UltraTech has also launched an electrician engagement programme to build product awareness, installation quality and brand recall. The company has already onboarded more than 1,600 electricians and aims to train over 40,000 during the next year.

Jefferies said this could help drive distribution pull and influence product choice at the point of installation. The company has also assembled an experienced management team for the new venture, including executives with backgrounds at CG Power, Havells and Polycab. 

The brokerage said the wires and cables business extends UltraTech’s existing building-solutions portfolio, which includes white cement and putty, ready-mix concrete and construction chemicals. These adjacent businesses accounted for 13% of FY26 sales. 

ALSO READ

UltraTech Cement: Motilal Oswal sees 22% upside on capacity-led growth

Motilal Oswal has retained a ‘Buy’ rating on UltraTech Cement with a target price of Rs 13,800, implying an upside of 22%. The brokerage’s positive stance is based on the company’s earnings growth and capacity expansion plans, which are expected to support higher volumes and operating performance.

UltraTech is continuing with an aggressive cement capacity expansion programme through greenfield and brownfield projects, along with inorganic additions. The company is targeting a significantly larger national capacity base, while annual capex is around Rs 10,000 crore, according to the report. The scale-up remains an important part of the brokerage’s case for the stock.

The broader earnings picture also supports the positive call. Jefferies’ report on UltraTech shows cement capacity rising from 197 MTPA in FY26 to 242 MTPA by FY29, while volumes are estimated to increase from 154 million tonnes to 205 million tonnes over the same period. EBITDA is projected to rise from Rs 17,020 crore in FY26 to Rs 27,314 crore in FY29. The report also notes that UltraTech is expected to reach around 241 MTPA by FY28, including recent M&A.

Motilal said, “UltraTech continued aggressive cement capacity expansion through greenfield / brownfield projects, targeting a significantly larger national capacity base.”

Capacity expansion remains a key earnings driver

UltraTech’s core cement business continues to expand rapidly. Jefferies expects cement volumes to rise to 205 million tonnes in FY29, while capacity is projected to increase to 242 million tonnes per annum over the same period. The wires and cables entry therefore adds another potential growth stream to an already expanding cement business.

The immediate focus will be on how quickly Ultravolt can establish distribution and build volumes, while the core cement business remains supported by capacity additions, cost efficiencies and operating leverage.

Disclaimer: The information provided in this article is for informational and educational purposes only and should not be construed as investment advice. Stock market investments are subject to market risks, and past performance or brokerage estimates do not guarantee future returns. Readers should conduct their own research and consult a qualified financial adviser before making any investment decisions.