UltraTech Cement Share Price Tumbles After Announcing Cables And Wires Foray

UltraTech Cement Ltd.'s share price fell on Thursday, after the company announced its foray into the cables and wires business on Tuesday.

This diversification aims to expand UltraTech’s presence in the construction value chain and meet the growing demand for cables and wires across various sectors, including residential, commercial, infrastructure, and industrial applications, it said.

The company’s board approved a capital expenditure of Rs 1,800 crore over the next two years for this venture. UltraTech plans to set up a new plant in Bharuch, Gujarat, with an expected commissioning date in December 2026. The company intends to leverage its existing connections with end customers to gain a share of the market.

This Rs 1,800 crore capex is part of UltraTech’s broader capex plan of Rs 8,000–9,000 crore, supported by an operating cash flow of Rs 10,000 crore.

Kumar Mangalam Birla, chairman of UltraTech Cement, emphasised that this venture is a strategic step to enhance the company’s footprint in the construction industry. The cables and wires industry has seen a revenue compounded annual growth rate of 13% between FY19 and FY24, driven by the shift from the unorganised to the organised market.

The scrip fell as much as 5% to Rs 10,415 apiece. It pared losses to trade 3.78% lower at Rs 10,550 apiece, as of 09:36 a.m. This compares to a flat NSE Nifty 50.

It has risen 6.02% in the last 12 months. Total traded volume so far in the day stood at 7.1 times its 30-day average. The relative strength index was at 33.

Out of 42 analysts tracking the company, 34 maintain a 'buy' rating, five recommend a 'hold' and three suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 19.1%.