Shares of Polycab India Ltd., Havells India Ltd., and peers like RR Kabel, Finolex Cables will be in focus yet again on Thursday, March 20, after another conglomerate has announced a foray into this space.
In an exchange filing on Wednesday, Adani Enterprises, the flagship company of the Adani Group said that its wholly-owned subsidiary Kutch Copper Ltd. has incorporated a JV company called Praneetha Ecocables Ltd., in which, Kutch Copper will have a 50% stake. That also puts shares of Adani Enterprises in focus ahead of today’s trading session.
The JV will be engaged in the manufacturing, marketing, distribution, buying and selling of metal products, cables and wires.
This makes Adani the second major conglomerate after the Birla Group, who announced a foray into the cables and wires space last month via UltraTech Cement.
UltraTech’s decision to enter this space had triggered a sharp sell-off in shares of the incumbent cables and wires companies, although most of them downplayed the impact of this, due to the long gestation period involved in the industry.
In an interaction with CNBC-TV18 on February 27, KEI Industries CMD Anil Gupta had mentioned that UltraTech will take a minimum of three years to start operations and that the Cables & Wires space has enough space for a new entrant.
KEI Industries expects the cables business to contribute to 75% of the overall product mix.
Rajesh Jain, CFO at RR Kabel had also told CNBC-TV18 that UltraTech’s entry into the space is not as bad as the market fears.
Elara Capital’s vice president Harshit Kapadia had told CNBC-TV18 on February 28 that he will remain cautious on the cables and wires space for now and that there could be some declines in this space once UltraTech’s strategy unfolds.
Shares of Adani Enterprises have risen 6.3% over the last one month, while those of Polycab are down 6% during the same period.
