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Polycab India Ltd is feeling the heat from UltraTech Cement Ltd's entry into wires and cables (W&C), with its shares down 7.5% since the latter launched Ultravolt on 3 September. Investors are worried about what rising competition could mean for Polycab’s 30-31% share of the organized market and its margins, though the immediate business impact may be limited. Ultravolt Ultravolt aims to be the second largest player in wires by capacity, backed by an investment of ₹1,800 crore. UltraTech’s initial push appears focused on wires, while cables, where entry barriers are higher, make a chunk of Polycab’s mix. That offers some insulation for now, even as the Street keeps a close watch on Ultravolt’s pricing and expansion. “Power transmission and industrial cables may require 2-4 years for pre-qualification whereas wire sales (B2C) may not counter material entry barriers,” said Jefferies India analysts, adding, “In this context, we foresee lower competitive risk for Polycab (cables is about 70-75% of its mix).” For now, Polycab’s September quarter (Q2FY27) results are set to benefit from strong copper prices, a trend seen in Q1 as well. “From our interaction with Polycab, we infer: rising commodity prices could aid revenue growth in Q2; quarter-end surge in copper which could drive pre-buying in anticipation of price hikes and result in slightly higher volume growth QoQ,” said JM Financial Institutional Securities’ analysts in a report on 9 September. They pointed out that the margin could trend flat to slightly higher sequentially, but lower year-on-year. Polycab’s consolidated revenue rose 39% year-on-year in Q1FY27 to ₹8,210 crore. The W&C business contributed 87% of Q1 revenues, followed by 9.2% from fast moving electrical goods (FMEG) and the rest from engineering, procurement and construction (EPC) vertical. However, W&C volume growth was in the low- to mid- single-digit, which was a bit of a sore spot. Overall, Ebitda margin fell 70 basis points to 13.8%, partly due to weak exports. This also means a recovery in exports in future, should support margin. Factoring recent losses, Polycab’s shares have gained 10% over the last year. The stock trades at almost 38 times estimated FY27 earnings, as per Bloomberg consensus. Better-than-expected Q2 results, especially on the volume growth front, may bring cheer.
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