UltraTech Cement’s decision to venture into the wires & cable sector (W&C) on Thursday singed the shares of KEI Industries, Polycab India, Havells India and RR Kabel on fears that it could affect their valuation multiples and margins.

On Tuesday, UltraTech Cement, which is the country’s largest cement maker, announced a plan to extend its presence in the construction value chain, through wires and cables with a nominal capital expenditure of ₹1,800 crore over the next two years.

UltraTech Cement had said that the entry through its building products division, is in line with the company’s strategy to strengthen its position as a comprehensive building solutions provider.

The firm added that it will leverage its extensive manufacturing expertise coupled with its connect with end-customers to deliver high-quality wires and cables thereby targeting a higher share of the customers wallet.

The proposed plant will be set up near Bharuch in Gujarat and is expected to be commissioned by December, 2026.

UltraTech Cement aims to meet the growing demand for wires and cables across various sectors, including residential, commercial, infrastructure and industrial applications.

However, its decision led to W&C stocks plunging up to 21 per cent today.

The worst hit was KEI Industries which crashed 21.03 per cent on the BSE to settle at ₹2,997.70.

Similarly, RR Kabel plummeted 19.92 per cent to ₹888.50, Havells India by 6.33 per cent to ₹1,449.60, and Polycab India by 18.88 per cent to ₹4,677.

The shares of UltraTech Cement also ended lower by 4.99 per cent at ₹10,420.65 as the Street was displeased by its diversification.

Brokerage Motilal Oswal said in a note that the move could affect the valuation multiples of W&C firms due to the entry of a sizeable player.

UltraTech’s latest decision is akin to that of Grasim Industries which disrupted the domestic paints industry in 2024 through the launch of Birla Opus.

According to its website, Birla Opus has six fully automated, integrated, and global scale manufacturing plants with a total commercial capacity of 1,332 MLPA (million litres per annum) — a 40 per cent addition to the current industry capacity.

Grasim’s entry had also led to shares of Asian Paints and Berger Paints taking a hit.

``We think, given UltraTech’s strong presence in the construction material business, the company will initially focus on the building wire and low voltage construction cables segment, which has relatively low barriers to entry,’’ analysts at HSBC said in a note.

``UltraTech’s entry and scale-up are coming at a time the industry is likely at the end phase of its cycle, with significant capacity addition plans by the incumbents. We now expect FY27-32 estimated CAGR (compounded annual growth rate) in operating profits to decline 1.6-2 per cent for pure play C&W companies,’’ the brokerage added.