In a surprising move, shares of major cable manufacturers dropped sharply on March 20, 2025, following the announcement of Adani Group's entry into the cable manufacturing sector through a new joint venture called Praneetha EcoCables. The reaction from the market illustrated investors' growing concerns over increased competition in an already saturated industry.
On March 19, Adani Enterprises revealed that its subsidiary, Kutch Copper Limited, incorporated the joint venture, Praneetha EcoCables, in partnership with Praneetha Ventures. Both parties will hold an equal stake in the new entity, which aims to manufacture, market, distribute, purchase, and sell various cables and metal products. The strategic move serves as Adani’s latest expansion in diversification, following recent ventures by other conglomerates.
This announcement triggered a massive downward trend across shares of leading players in the sector. KEI Industries experienced the sharpest decline, with share prices plummeting by over 14%, hitting a low of Rs 2,802.00 on the NSE by 11:00 AM. The stock continued trading around Rs 2,808.35, reflecting a decrease of 14.46% from the previous close. Compounding the downturn, KEI had already hit a 52-week low of Rs 2,954.95 earlier in February, adding pressure to its shareholders amid heightened sell-offs.
Havells India also felt the pinch, with its shares trading down by 4.64%, reaching Rs 1,485.05 around 11:03 AM that day. The company had recently enjoyed gains following a government move to exempt key components from mandatory certification, alleviating supply concerns. However, the investor sentiment shifted radically in the wake of the news from Adani.
Polycab shares plunged nearly 9.43%, trading at Rs 4,925.46 shortly after the market opened, falling from previous highs just a day prior when it closed at Rs 5,438.40, reflecting an inability to sustain those levels in light of new competitive pressures. RR Cables was not spared either, with its stock declining by 2.20% to Rs 896.20 during morning trades, underlining a sector-wide pessimism. The announcement by Adani Group, however, came just days after the Aditya Birla Group's Ultratech Cement announced its plans to establish a similar presence in the cables and wires space, further alarming market watchers.
Industry analysts have weighed in on the situation, noting that while the competition may escalate due to new entrants like Adani, fundamental factors such as rising raw material prices—particularly copper and aluminum driven by tariffs imposed from the US—may have a more pronounced impact on these companies’ profit margins in the long run. Still, many experts suggest that the anticipated revenue trajectories for these firms will not be significantly hampered in the immediate future between fiscal years 2025 and 2028.
Additionally, KEI Industries has seen promising growth figures in its previous fiscal reports, highlighting a 19.8% increase in revenue. For Q3 FY 2024-25, the company reported revenues of Rs 2,467.27 crore, an increase from Rs 2,059 crore during the same period last year. Their net profit surged by 9.38%, reaching Rs 164.81 crore versus Rs 150.67 crore year-on-year. These results set the stage for potential recovery, contingent upon market conditions improving.
Despite the current volatility, analysts remain divided on the outlook for KEI Industries. According to estimates from Trendlyne, KEI shares have an expected target price of Rs 4,829.60, implying a possible upside of 73.06% from its latest pricing. Among analysts, despite technical indicators advising sell-off strategies, 53% recommend buying into KEI, citing long-term performance as a pivotal factor. Moreover, historical metrics show KEI Industries has gained over 150% in stock value over the last three years.
In light of the recent developments, market participants are left pondering whether to buy, sell, or hold their positions in KEI and other affected stocks. With the looming presence of Adani Group in the cables sector, as well as potential new entrants, the competitive landscape is set to change rapidly.
As the dust settles from this seismic shift, all eyes will be on how KEI Industries and its peers navigate these challenges while striving to retain market share amid escalating pressures. Investors and analysts alike will need to monitor raw material trends, consumer demand, and strategic responses from the incumbents, as the evolving narrative unfolds.
This turmoil underscores the importance of caution and diligent analysis for those involved in this volatile sector.
