UBS also weighed in on UltraTech’s strategic entry into the cables and wires segment, highlighting that the company aims to leverage synergies with its cement business rather than disrupt the broader C&W market.
According to UltraTech’s guidance,
- 60% of revenues will come from housing wires, with the remaining from cables (low tension, flexible, and control cables).
- The company estimates it will only tap into 60-65% of the industry’s total addressable market (TAM) rather than aggressively expanding across the sector.
- Capex will be capped at ₹18 billion up to FY31, with the focus on optimizing utilization rather than flooding the market with supply.
- The company targets industry-level profitability in C&W, with return on capital employed (RoCE) at 25%, suggesting UltraTech is unlikely to engage in aggressive pricing strategies.
UBS also adjusted its targets for existing C&W leaders, cutting:
- KEI Industries to ₹5,000 from ₹5,700, maintaining a ‘Buy’ rating.
- Polycab India to ₹7,700 from ₹9,000, also retaining a ‘Buy’ stance.
