JM Financial downgrades Polycab, KEI and RR Kabel as competition reshapes wires outlook
JM Financial cut its view on Polycab India, KEI Industries and RR Kabel, citing slower volume growth, high copper prices and intensifying competition. The brokerage expects new entrants UltraTech and Diamond Power to capture 11–12% market share by FY29.
What happened
Polycab India · JM Financial downgraded Polycab, KEI Industries and RR Kabel amid concerns over slowing cable-and-wire volume growth, elevated copper prices and
Key facts
- Polycab share price: Rs 8,732, down 2.08%
- KEI Industries share price: Rs 5,174, down 3.02%
- RR Kabel share price: Rs 2,658.80, down 7.29%
- Polycab target price: Rs 9,550
- KEI Industries target price: Rs 5,750
- RR Kabel target price: Rs 2,750
- UltraTech and Diamond Power projected combined FY29 revenue: about Rs 17,000 crore
- Potential new-player market share: 11-12%
- Indian cables and wires industry projected FY29 value: Rs 1.52 lakh crore
- Addressable domestic opportunity after new competition: Rs 1.35 lakh crore
- FY26-FY29 domestic CAGR: 10.5%
- FY26-FY29 CAGR including exports: 12-13%
Why this matters
The projected 11–12% FY29 share for new entrants highlights a rapidly consolidating competitive landscape, increasing the strategic value of scale, distribution reach and differentiated product portfolios.
What to watch
- Sequential decline in domestic wire-and-cable volumes or material gap versus industry demand growth.
- Copper prices remaining elevated while company realizations fail to rise proportionately.
- Quarterly EBITDA-margin misses, higher channel incentives or inventory build-up at dealers.
- UltraTech or Diamond Power announcing faster-than-expected plant commissioning, dealer additions or aggressive pricing.
- Evidence that challenger market share exceeds the projected 11-12% FY29 trajectory.
- Sustained housing, real-estate, transmission and renewable-capex strength that supports industry-wide demand despite competition.
- Monitor quarterly volume growth versus value growth, separating copper-price-led realization gains from underlying demand.
- Track gross margin, EBITDA margin, dealer incentives and employee/distribution expenses for evidence of competitive intensity.
- Compare capacity additions, commissioning schedules and distribution expansion at UltraTech and Diamond Power against incumbents' expansion plans.
- Watch for price cuts or extended credit terms in housing wires, especially in regional and semi-urban markets.
- Assess whether Polycab, KEI and RR Kabel shift mix toward premium cables, exports, EPC, renewables and institutional business to offset retail-wire pressure.