Polycab Vows to Defend Market Share After Birla Enters Wires

Polycab India Ltd will go "all out" to defend its market position, a top executive stated, responding to the Aditya Birla Group's high-budget entry into India's wires and cables industry. Shashi Amin, CEO of B2B channel & corporate communication at Polycab, told Mint the company is closely tracking competitor pricing after the new rival's launch caused a sell-off in sector stocks.

He dismissed the recent share price fall as a knee-jerk reaction. Since the Aditya Birla Group announced commercial production at its new Gujarat plant on 1 September, Polycab's shares have fallen 7%, underperforming the Nifty index. Other major players like RR Kabel, Havells India, and KEI Industries have seen share price declines of 5-20% in the same period.

Market Growth and New Competition

Amin expects the overall market to grow from just over ₹1 trillion in the year ending March 2026 to ₹1.5 trillion by 2030, driven by power grid expansion and real estate growth. He believes this growth will create room for new entrants. However, he pointed out that UltraVolt, the Birla group's new business, is initially focused on wires for the consumer sector, which constitutes less than a third of the total market.

"Unlike wires, where entry can be relatively easier, cables require approvals and pre-qualification from government agencies, utilities, consultants and contractors," Amin said.

Capacity Expansion and Margin Pressure

The competitive landscape is intensifying as the new entrant launches with significant capacity while incumbents are also expanding. The Aditya Birla Group launched UltraVolt last week with an initial investment of ₹1,800 crore, building a plant that equals a tenth of the market's existing capacity. Kumar Mangalam Birla has set a goal for the business to become one of India's top two sellers within five years.

Polycab, in contrast, has committed around ₹8,000 crore in capital expenditure over the next four years. "For them, it's one time. For me, the similar investment will be for the next four years," Amin noted. He acknowledged that the added industry capacity could pressure margins in the near term, especially in wires. "There will be a bit of pressure on everybody as far as margins are concerned," he said.

Amin also rejected the idea that UltraVolt gains an inherent advantage from being part of the same group as Hindalco, a leading producer of copper and aluminium. He stated that Polycab has received assurances from Hindalco's leadership that it will be treated on par with UltraVolt for raw material supply.

Analyst Views and Polycab's Position

Analysts at JM Financial noted competition is increasing with the entry of UltraVolt and the resurgence of Diamond Power, which is backed by the Aditya Group. Bajaj Electricals and Crompton are also expanding their wire ambitions. In a report, analysts Shalin Choksy and Jignesh Thakur expressed concern that UltraVolt's strategy could hurt industry-wide pricing discipline and cap incumbents' margins.

Polycab currently holds an estimated 30-31% share of the organised market, which itself accounts for 70-72% of the overall industry. The six largest players collectively control about 60-63% of the market. Amin said the company is targeting a doubling of its 2025 revenue base by 2030 and believes it could beat that schedule.

One key growth area is data centres, where Polycab has been building a presence for seven to eight years. The company estimates that every megawatt of data-centre capacity requires about ₹3.5 crore worth of wires and cables.