Indian stock markets experienced significant fluctuations on February 25, 2025, with shares of major companies such as Polycab India, KEI Industries, and Havells India witnessing declines of up to 15% following UltraTech Cement's announcement of its entry to the wires and cables (W&C) segment.
UltraTech Cement revealed plans to invest Rs 1,800 crore over the next two years to establish its presence within the W&C market, which sent tremors through its competitors’ stock prices. By mid-morning trading, shares of Polycab India plummeted to Rs 4,894.80 (down 15%), KEI Industries to Rs 3,226.65 (down 15%), and R R Kabel to Rs 962.20 (down 13%). Havells India too saw setbacks, trading down 9% at Rs 1,402.50.
While the BSE Sensex reported minor gains of 0.01%, reaching 74,612.66, the drops among W&C stocks drew attention. This market shift followed UltraTech's commitment to bolster its positioning as a comprehensive Building Solutions provider, which analysts from CLSA commented on, stating, “The proposed entry of UltraTech Cement is likely to be value accretive to its shareholders.”
Analysts predict the W&C sector will need to maintain growth between 11% - 13% for the industry to absorb the forthcoming expansions, including UltraTech's. The wires and cables segment is significant, valued at approximately Rs 80,000 crore. Historically, it has demonstrated around 13% revenue compound annual growth rate (CAGR) since FY19.
Separately, KEI Industries observed its share price fall due to broader market dynamics, even as it reported strong year-on-year growth of 9.4% for its quarterly net profit, totaling Rs 1,648 million. Over the year, KEI's share price rose from Rs 3,180.1 to Rs 3,499, reflecting broader pressures within the BSE POWER index, which saw declines among key players like Thermax and Power Grid Corp.
On the industry's downturn, the BSE POWER index fell from 6,679.8 to 6,003.6 over the past year, marking a drop of 10.1%. Conversely, major gainers today included Indusind Bank and L&T, indicating mixed market sentiment.
Analysts are expressing concern about the overall profitability of the wires and cables industry, particularly if demand does not align with the significant expansions underway. “Given the retail focus and brand recall, UltraTech has a relatively higher chance to win in wires than cables,” analysts remarked.
Meanwhile, shares of Praj Industries also reflected downward movement, trading at Rs 511.2 after dropping 5%. The BSE CAPITAL GOODS index showed slight decreases as well; the current market appears turbulent, reflecting mixed sentiments across segments.
Prestige Estates faced additional challenges as its share price fell over 3% due to investigations conducted by the Income Tax Department. Reports state the investigation started on the same day as their stock performance issues began. CMD Irfan Razack stated, “The quarter was moderate, with no new launches and constrained handovers caused by local issues related to e-khata,” correlatively recognizing their significant drop in quarterly sales bookings and declining profits.
Despite these pressures, Prestige Estates reported sustenance sales of ₹3,000 crores and demonstrated resilience through solid brand recognition and effective product offerings. The comprehensive account of real estate fluctuations reflects broader market dynamics as interests continue to shift.
Overall, the Indian stock market navigates through both opportunity and challenge, with aggressive expansions within specific industries, regulatory scrutiny on key players, and fluctuated investor sentiment contributing to the rollercoaster of share prices.