Havells To Polycab: Wire And Cable Shares Fall As UBS Sees Rising Competition As Negative
Shares of Havells India Ltd., Polycab India Ltd. and KEI Industries Ltd. fell on Thursday, after UBS said that rising competition was a negative for the companies. While Havells fell over 5%, shares of Polycab fell 7% and KEI Industries stock hit lower circuit.
This comes after Adani Enterprises Ltd. through its subsidiary entered metal products, cables and wires segment. UBS in its note said that competitive intensity in the segment continues to rise as the "second large serious player" enters the segment.
Kutch Copper Ltd., a wholly owned subsidiary of Adani Enterprises, incorporated a joint venture company with Praneetha Ventures Pvt. on Wednesday. Praneetha Ecocables Ltd.—the JV—will manufacture, market, distribute and sell metal products, cables and wires.
Adani Enterprises, through its subsidiary Kutch Copper, is establishing a cutting-edge copper smelter in Mundra, Gujarat. The initial investment of approximately $1.2 billion will enable an annual production capacity of 0.5 million tonnes in the first phase. The facility will manufacture copper cathodes, rods, and other byproducts, significantly contributing to India's ambition of self-sufficiency in copper production.
Last month, cable stocks eroded Rs 30,000 crore of market cap after UltraTech Ltd.'s board approved a capital expenditure of Rs 1,800 crore in a period of two years for the company's foray into the market. The company plans to set up a plant in Bharuch, Gujarat. The expected commissioning date for the plant is earmarked for December 2026.
Shares of Havells fell as much as 5.51% to Rs 1,472.15. Similarly the shares of Polycab declined as much as 7.78% and KEI Industries hit a 10% lower circuit. Shares of Finolex Cable Ltd. were also trading 2.47% lower.
RR Kabel Ltd. stock fell as much as 4.23% in early trade, before paring loss to trade 2.31% lower as of 10:02 a.m. at Rs 895.85 apiece. V-Guard shares fell 0.57% to Rs 348.10.
Disclaimer: NDTV Profit is a subsidiary of AMG Media Networks Limited, an Adani Group Company.
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