Wire and cable market has room for another player, says UltraTech

The company added that cement remains its core business, while entry into wires and cables is an adjacencies play

Aditya Birla Group’s UltraTech Cement on Friday said the wires and cables industry has room for one more player, adding they did not expect their entry to impact the prices in the segment.

 

Earlier this week, UltraTech announced its entry into the wires and cables business with a planned capex of ₹1,800 crore. The company aims to start operations in this segment by December 2026.

 

In a presentation released on Friday, UltraTech said the capacity of this division would be 35-40 lakh KM. The company expects the wires and cables industry to grow at 13 per cent for the next 5 years. The expected internal rate of return for the investment is 25 per cent, with a ROCE of 20 per cent.

 

Atul Daga, UltraTech’s chief financial officer said during the analysts call, that pricing won’t be impacted with another player.

 

The executive also reiterated cement remains the core business, which is expected to have ₹1 trillion capital employment soon, with the company operating 214 million tonnes per annum (MTPA) by the end of FY27. 

 

Daga added the product mix would be 60:40 of wires and cables. The firm is aiming for the residential market in the wires segment, and infrastructure for cables. “Almost 85 per cent of wires are covered by the residential market, and 65 per cent of cement demand comes from residential markets.”

 

“The whole market for cables, I think, would be infrastructures like metros, airports, railways, residential complexes, renewable energy, PV solar. UltraTech is present in all the projects that are taking place in the country,” he adds.

 

On UltraTech’s decision to enter this segment, Daga said: “As part of extending our offering from Building Products Division (BPD), we have examined multiple other adjacencies – pipes, tiles, wood adhesives, sanitary fitting, furniture, lights, and so on, and dropped all these product categories because they were not as good as expected.” He said cables and wires was a strategic extension as these products are on the back of the wall, which the company is already building. Daga assured analysts the company is unlikely to consider an entry into the other adjacencies of pipes, wood, sanitary fitting and so on.

 

On raw material sourcing, he said the proposed factory at Jhagadia in Gujarat is in close proximity to the copper-producing facilities in Gujarat. Group entity Hindalco Industries also operates a copper smelting unit near Dahej in the same state.