Cables/wires get all tangled up again!

First it was Ultratech and now it’s the Adani group announcing plans of entering the cables and wires sector.  If the announcement of Ultratech caused the stocks in the sector, Polycab, KEI Industries, Havells to drop and dominate the losers list on the BSE, ditto is the reaction today too.

Yesterday, after market hours, Adani Enterprises announced that its 100% subsidiary, Kutch Copper has formed a 50:50 JV with Praneetha Ventures, known as Praneetha Ecocables Ltd and will make cables and wires.

This has once again spooked the market and is the usual knee-jerk reaction as this is just an announcement and it will take a while before either Ultratech or Adani group actually start commercial production of cables and wires. Thus the shirt and mid-term story remains intact for market leader, Polycab.

Ten days ago, Mr.SP Tulsian had opined that these entries of bigwigs shows that a large opportunity exist for the sector, on massive infrastructure creation, renewables adoption, ageing power assets in the country, sunrise opportunity like data centre, booming real estate etc, estimated of Rs. 80,000 cr domestic wires and cables industry, being 80% organised (~Rs. 65,000 cr), spread among several players, with Polycab having 25% organised market share.

KEI went down almost 14.5% to Rs.2809.85 and is the top loser; Polycab is number two, down 10% at Rs.4912.75; the third loser is Havells, down a little over 1% at Rs.1470.80.