India’s ₹1 lakh crore wires and cables industry is finding an unexpected growth engine beyond power, real estate and industrial capex. As Artificial Intelligence adoption accelerates and cloud infrastructure expands, data centres are emerging as one of the next major demand drivers for specialised cables.
According to Polycab, a cable manufacturer, every 1 megawatt (MW) of data centre capacity requires nearly ₹3.5 crore worth of cables, creating a sizeable opportunity as new facilities come online. The segment alone could generate a ₹57,400 crore incremental market over the next six to eight years at an incremental capacity of 16.4 GW.
CRISIL has also identified data centres as one of the structural demand drivers for the organised wires and cables industry. Therefore, the rating house estimates industry volume growth to be 10%, while revenue growth (28-30%) is expected to outpace volume growth. This growth will be driven by price hikes along with high-margin renewable energy and data centres sectors.
As investments in digital infrastructure accelerate, this article examines three companies with a strong presence in the sector. These stocks are selected on the basis of Q1FY27 earnings.
#1 R R Kabel: Expanding Beyond Wires into High-Growth Cable Markets
R R Kabel, one of the leading electric cable companies, operates across two business segments: Wires & Cables (W&C) and Fast Moving Electrical Goods (FMEG). The company started FY27 on a robust note amid strong demand from infrastructure, industrial projects and electrification.
Profitability Under The Microscope
Revenue grew by 54% year-on-year to ₹3,168.2 crore in Q1FY27. The company’s profitability also surged significantly. EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) doubled, growing by 99% to reach ₹285.3 crore, while margin expanded by 205 basis points to 9%. Furthermore, Profit After Tax (PAT) grew by 129% to ₹205.2 crore (including an exceptional item of ₹14 crore).
Wires & Cables: The Primary Growth Engine
The W&C segment is RR Kabel’s primary growth engine. In Q1FY27, this division’s revenue grew by 57% to ₹2,880 crore, outperforming previous quarters. The segment’s profit before tax (PBT) stood at ₹285.4 crore, up 105%, driven by scale benefits, better cost absorption, and improved product mix.
The segment saw an overall volume growth of 17% YoY. R R Kabel is expanding its cable business across B2B projects, industrial, and power applications. This segment delivered growth of over 25%, significantly outpacing the traditional wires business, which grew by 10-12%. Meanwhile, wire capacity utilisation remains at 65-70%, leaving ample room for future volume growth.
FMEG Break-Even and the Push for Premiumization
The FMEG division consists of lighting, ceiling fans, appliances (like geysers, coolers, and small room appliances), and electrical switches. In Q1FY27, the segment revenue grew by 28% to ₹288.2 crore. The FMEG business finally achieved operational breakeven, recovering from a segment loss of ₹7.1 crore in Q1FY26.
This profitability turnaround is largely attributed to premiumization efforts, operating leverage, and better realisations rather than sheer volume expansion (which remained relatively flat year-over-year). Currently, premium products contribute almost 25% of the total FMEG revenue. Management is targeting operational breakeven on a full-year basis.
Data Centres: The Next Expansion Frontier
Data centres are currently viewed by RR Kabel as an important medium-term growth driver, particularly for their B2B cable segment. Though still in the early stages, the company is already securing early orders. Currently, they are supplying conventional cables to these projects, which are a standard part of their product lineup.
As of now, revenue from data centres is very small compared to the overall size of the wire and cable industry. However, the company plans to continuously add new data centre customers as the sector matures.
The rise of data centres is a key reason RR Kabel anticipates its cable business will grow faster than its traditional domestic wire business. Management lists data centres alongside green energy, solar, and broader infrastructure development in India as primary catalysts. Volume growth is expected at 18% year-on-year.
Beyond the domestic market, RR Kabel sees rising investments in power infrastructure and data centres in the US as a big opportunity for Indian exporters. To capitalise on this, the company has already secured some necessary approvals and is actively onboarding new US customers. Exports contribute 29% to revenue.
₹1,200 Crore Capex and Export Ambitions
To support its growth, RR Kabel is investing ₹1,200 crore spanning FY26 to FY28. Approximately 80% of this total capex is strictly directed toward scaling the cable business. Of this, the company invested ₹300 crore last year and plans to invest ₹650 crore in FY27. Part of the new plant is scheduled to come online during Q2FY27, and the rest later in FY27.
#2 Polycab: Leveraging Market Leadership to Capture Emerging Demand
India’s leading W&C company, Polycab India, operates across three business segments: W&C, FMEG, and Engineering, Procurement, and Construction (EPC). W&C is the core segment. Polycab serves both channel and institutional sales. Its strong distribution network spans Tier 2, Tier 3, and Tier 4 markets.
Revenue Surge and Wires & Cables Margins
The company’s revenue grew by 39% to ₹8,209.7 crore in Q1FY27, driven by 39% growth in W&C business to ₹7,155 crore and 71% growth in FMEG business. W&C business volume growth was in the low to mid-single digits due to a very high base of the previous year. Segment EBIT was ₹953.3 crore, a 26% YoY growth, bringing the segment margin to 13.3%.
The FMEG Pivot and Premiumization
FMEG growth, on the other hand, was broad-based across all categories, but solar products registered over 2x growth. Segment EBIT reached ₹60.6 crore, with a margin of 8.0%. The business benefits from operating leverage and an increasing mix of premium products. Overall, Polycab reported EBITDA growth of 32% to ₹1,136.2 crore with margins at 13.8%.
PAT surged by 33% to ₹796.7 crore. Looking ahead, data centres represent a significant and dedicated strategic focus area for Polycab India. The current installed base of data centres in India is approximately 1.6 gigawatts (GW), a capacity that took roughly 5 to 7 years to build.
The Multi-Gigawatt Data Centre Opportunity
Now, Polycab estimates that total capacity will scale up to between 8 GW and 18 GW over the next 5-8 years. As per management estimates, every 1 MW of data centre capacity translates to around ₹3.5 crore worth of cable demand.
The product mix for this specific demand is typically split, with 50% to 60% being conventional cables and the remainder consisting of optical fibre. Management projects that data centre expansion will create a ₹20,000 to ₹25,000 crore market opportunity over the next 6 to 8 years.
This estimate is based on the lower bound of the projected incremental capacity addition (6.4 GW), which translates to an exact market size of ₹22,400 crore. At the upper end, demand for incremental capacity of 16.4 GW comes at ₹57,400 crore.
Management also expects defence and EV charging to generate entirely new revenue streams. The company has supplied a majority of the conventional cable requirements for several existing data centre installations. For example, Polycab has supplied cables for Vodafone Idea’s data centres in Mohali, Pune, and South India.
Sustaining Growth in a ₹1 Lakh Crore Market
Polycab management estimates that if the capacity is added slowly (e.g., just 1 GW per year, generating ₹3,500 crore of industry-wide demand), it may not immediately cause a substantial percentage shift against the W&C industry’s ₹1 lakh crore total addressable market.
However, if capacity comes online rapidly, such as 5 GW being added simultaneously, it will result in a sizable and immediate surge in demand. Currently, the company holds a decent order book for data centres and notes that several new establishments are about to start.
As the largest player in the industry, Polycab anticipates sustained and broad-based demand for its core business. The company is confident in its ability to consistently grow volumes at 1.5x the market growth rate until at least FY30. Polycab also expects the FMEG business revenue to grow at 1.5x to 2x the industry average.
#3 HFCL: Optical Fibre Specialist Riding the Hyperscaler Wave
HFCL Limited holds a prominent leadership position in the cable business, officially recognised as the number one Optical Fibre Cable (OFC) supplier in India. It successfully transitioned from a net loss in Q1FY26 to profitability in Q1FY27.
Revenue Surge and 1,832 BPS Margin Expansion
HFCL reported revenue growth of 120% to ₹1,915 crore in Q1FY27, driven by order book execution. HFCL’s EBITDA surged by 937.2% to ₹445.3 Crore in Q1FY27, albeit from a low base. Margin expanded by 1,832 bps to 23.3%.
As a result, it turned profitable (₹245.6 crore) against a loss of ₹29.3 crore in Q1FY26. A shift from low-margin turnkey projects to a high-margin product business (80% of revenue) drove the growth. Management states that hyperscaler data centres are creating a strong demand for optical connectivity.
Expanding Capacity and Backward Integration
To support this growth, HFCL is expanding its optical fibre capacity to approximately 339 lakh fibre kilometres (fkm) per annum and its OFC capacity to 423 lakh fkm per annum. Furthermore, it is investing ₹580 Crore in a backward integration project for preform manufacturing, targeting a capacity of 300 MT per annum by July 2029.
5x Revenue Visibility and Export Ambitions
This is expected to strengthen the supply chain and could help expand margins. Management now expects revenue to grow by 40% in FY27. HFCL is aiming to expand its EBITDA margin from 16.7% in FY26 to between 22% and 25% by FY29. HFCL aims to generate 80-85% of revenue from high-margin products. Exports are expected to account for more than 60% of its revenue.
HFCL’s order book stood at ₹26,665 crore at the end of Q1FY27. This order book provides revenue visibility of over 5x as per FY26 revenue of ₹4,949 crore.
How the Three Companies Are Positioned in India’s W&C Industry:-
| Particulars | R R Kabel | Polycab | HFCL |
| Revenue (₹ crore) | 3,168.2 (+54% YoY) | 8,209.7 (+39%) | 1,915 (+120% YoY) |
| EBITDA (₹ crore)/Margin | 285.3 (9.0%) | 1,136.2 (13.8%) | 445.3 (23.3%) |
| Net profit (₹ crore) | 205.2 (+129% YoY) | 796.7 (+33% YoY) | 245.6 (Turnaround) |
| Data Centre | B2B Cables | Conventional Cables & Optical Fibre | Optical Connectivity |
| Key Growth Catalyst | ₹1,200 crore Capex | ₹25,000 crore Data Centre TAM | ₹26,665 crore order |
| Growth Target | 18% Volume Growth | 1.5x Industry Volume Growth | 40%Revenue Growth |
The table highlights that while all three companies are positioned to benefit from India’s data centre expansion, each has a distinct growth strategy. Polycab leads through scale and market leadership, R R Kabel is expanding capacity to capture project demand, and HFCL is leveraging its optical fibre expertise to strengthen its position in digital infrastructure.
Valuation Check: Return Ratios vs Price Multiples
Industry leader Polycab leads R R Cable with its strong return on capital employed (ROCE) and return on equity (ROE). HFCL’s return ratios are currently moderate due to uneven profitability. In terms of valuation, all three companies trade at a premium to their industry median.
However, relative to the three-year historical multiple, all three players trade in line.
| Particulars | Price-to-Earnings Multiple (X) | Return Ratios | |||
| Company | 3Y Median | Industry | ROE (%) | ROCE (%) | |
| R R Kabel | 47.9 | 49.5 | 26.6 | 21.3 | 28.1 |
| Polycab | 48.0 | 48.4 | 26.6 | 23.0 | 33.2 |
| HFCL | 49.0 | 50.7 | 16.5 | 6.9 | 10.9 |
India’s wires and cables industry is entering a new growth phase, but not every company will benefit equally.
While R R Kabel is expanding its project cable business, Polycab is building on its leadership to capture emerging opportunities such as data centres, and HFCL is leveraging its optical fibre expertise to ride the digital infrastructure cycle.
The pace of data centre investments and execution on capacity expansion will determine who captures the biggest share of this evolving market. Keep these companies in your watchlist to analyse how they capture the industry tailwind.
Disclaimer
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data were unavailable have we used an alternative, widely accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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