Wire & Cable Ind To Heat Up With Adani, Birla Groups Diving In

New Delhi: After cement, billionaire Gautam Adani's group and Kumar Mangalam Birla's Aditya Birla Group are set for a face-off in the wires and cable business with both conglomerates announcing forays into the high double-digit growth sector.

In less than a month, both groups -- who have been fiercely competing in the cement sector leaving smaller players way behind -- announced their entry into the wires and cables segment, which is dominated largely by unorganised players and some smaller companies.

Entry of the two big players will intensify competition in the wires and cables industry, which posted 13 per cent compound annual growth rate (CAGR) in revenue between FY19 and FY24 and is migrating towards an organised branded market.

This was evident as sensing disruption from these deep pockets, share prices of listed players in the wires and cable segments slumped a day after March 19, when Adani Enterprises informed bourses of entering the segment. Share price of Polycab India, a leader in the segment, and KEI Industries reported 52-week lows on March 20. Similarly, shares of Havells also went down 5 per cent and while Finolex Cables was down 4 per cent the next day. Terming wires & cables "ideal segment for a new entrant with deep pockets", JM Financials has said, "This is an industry where no single player commands more than 15 per cent share in wires and 20 per cent in cables."

The industry comprises nearly 400 players, ranging from SMEs to large enterprises, with revenue of Rs 50-400 crore, it said. According to global brokerage Jefferies, the India cable & wire industry, which stands at Rs 80,000 crore (Rs 56,000 crore cables and Rs 24,000 crore wires), has an “attractive opportunity”. “There is enough room for a new player in the cable & wire industry”, as it is growing by double digits, and 30 per cent of the industry is still unorganised, analysts at Jefferies said.

Motilal Oswal Financial Services said the demand for cables & wires remains strong, with a stable long-term growth outlook. “Industry is estimated to grow at a multiplier of 2x of real GDP (12-13 per cent), whereas key players Polycab, KEI, Havells, and Finolex Cables have largely outpaced the industry. We estimate the overall C&W industry size to reach Rs 1,30,000 crore in FY29,” said Jefferies.