The cable and wire companies reported a strong performance in the March 2025 quarter, aided by robust demand across categories, improvements in channel inventories, and a pickup in infrastructure activities. The operating profit margins also improved, supported by cost efficiencies, favourable product mix and operating leverage benefits.
Data compiled from the Reuters-Refinitiv database for six industry players showed aggregate year-on-year revenue and PAT growth of 22.5% and 24.9%, respectively — significantly outpacing the Nifty 500 index, which posted top-line and bottom-line growth of 6% and 9%, respectively.
Historical industry perspective
Strong return ratios, market share gains, ability to generate healthy operating cash flows and focus on deleveraging supported the performance of organised players in the last few years. While the unorganised players lost market share due to limited cash flows and higher working capital requirements, organised players strengthened their position through capacity expansion, says an Ambit Capital report of May 2025. Such increased investments created the benefits of economies of scale.
The scale benefits led to high cash flow generation that supported deleveraging and reinforced organised players. These, coupled with initiatives like focus on brand building, distribution expansion, campaigns creating awareness around safety, loyalty programs and improved relationships with electricians, further supported the overall performance of organised listed players.
Recent concerns
The announcement of the entry of Aditya Birla and the Adani group in the industry in February-March this year created fears of increased competition and led to increased volatility in the share prices.
Experts believe that the near-term impact of new entrants is limited amid long gestation periods and entry barriers involving product approvals and performance validation. The management commentaries remain optimistic about the sustained growth over the next few years.
Furthermore, strong demand is expected to lead to a supply deficit. A PhillipCapital report estimates an organised market supply deficit as the manufacturing capacity will fall short of demand. It says that even the unorganised market is unlikely to bridge the demand gap. However, the PhillipCapital report has raised concerns about the pressure on EBITDA margins (due to new entrants) as the companies will have to increase distribution margins to push sales. This will result in slower EPS growth.
A sharp increase in capex is expected in 2025–26 to meet rising demand
Strong demand tailwinds
The industry is likely to see strong demand growth from government and private capex in industries such as power (Transmission and Distribution), real estate, railways, oil and gas, renewable energy and emerging applications in data centers and EVs. Furthermore, benefits from China Plus One and robust export opportunities (in the US/Europe markets) provide additional growth catalysts for the sector.
C&W industry is expected to grow at a CAGR of 13% between 2024-25 and 2029-30
To explore export opportunities, Indian companies are securing product-level certifications crucial for exports. A recent Motilal Oswal report says that the global investments in renewable energy are creating sustained demand for low and medium voltage cables, where Indian players have strong capabilities and cost advantages. It estimates the cables and wires industry to grow at a CAGR of 13% over 2024-25 and 2029-30, whereas the exports are expected to grow at a 14% CAGR during the period.
To cater to the strong demand, companies have planned aggressive capex. While the capex-driven supply will be absorbed by the increased demand, the Motilal Oswal report also mentions that the increased investments may create pressure on the industry’s RoCE in the future. Here is how the four listed players with decent analyst coverage are placed.
Tenacious hold
Price as on 17 June 2025. Source: Reuters-Refinitiv.
Polycab India
Data compiled from the Reuters-Refinitiv database for six industry players showed aggregate year-on-year revenue and PAT growth of 22.5% and 24.9%, respectively — significantly outpacing the Nifty 500 index, which posted top-line and bottom-line growth of 6% and 9%, respectively.
Historical industry perspective
Strong return ratios, market share gains, ability to generate healthy operating cash flows and focus on deleveraging supported the performance of organised players in the last few years. While the unorganised players lost market share due to limited cash flows and higher working capital requirements, organised players strengthened their position through capacity expansion, says an Ambit Capital report of May 2025. Such increased investments created the benefits of economies of scale.
The scale benefits led to high cash flow generation that supported deleveraging and reinforced organised players. These, coupled with initiatives like focus on brand building, distribution expansion, campaigns creating awareness around safety, loyalty programs and improved relationships with electricians, further supported the overall performance of organised listed players.
Recent concerns
The announcement of the entry of Aditya Birla and the Adani group in the industry in February-March this year created fears of increased competition and led to increased volatility in the share prices.
Experts believe that the near-term impact of new entrants is limited amid long gestation periods and entry barriers involving product approvals and performance validation. The management commentaries remain optimistic about the sustained growth over the next few years.
Furthermore, strong demand is expected to lead to a supply deficit. A PhillipCapital report estimates an organised market supply deficit as the manufacturing capacity will fall short of demand. It says that even the unorganised market is unlikely to bridge the demand gap. However, the PhillipCapital report has raised concerns about the pressure on EBITDA margins (due to new entrants) as the companies will have to increase distribution margins to push sales. This will result in slower EPS growth.
A sharp increase in capex is expected in 2025–26 to meet rising demand
Strong demand tailwinds
The industry is likely to see strong demand growth from government and private capex in industries such as power (Transmission and Distribution), real estate, railways, oil and gas, renewable energy and emerging applications in data centers and EVs. Furthermore, benefits from China Plus One and robust export opportunities (in the US/Europe markets) provide additional growth catalysts for the sector.
C&W industry is expected to grow at a CAGR of 13% between 2024-25 and 2029-30
To explore export opportunities, Indian companies are securing product-level certifications crucial for exports. A recent Motilal Oswal report says that the global investments in renewable energy are creating sustained demand for low and medium voltage cables, where Indian players have strong capabilities and cost advantages. It estimates the cables and wires industry to grow at a CAGR of 13% over 2024-25 and 2029-30, whereas the exports are expected to grow at a 14% CAGR during the period.
To cater to the strong demand, companies have planned aggressive capex. While the capex-driven supply will be absorbed by the increased demand, the Motilal Oswal report also mentions that the increased investments may create pressure on the industry’s RoCE in the future. Here is how the four listed players with decent analyst coverage are placed.
Tenacious hold
Price as on 17 June 2025. Source: Reuters-Refinitiv.
Polycab India
- It reported a strong performance in the March 2025 quarter with revenue and net profit exceeding Reuters-Refinitiv estimates by 5.6% and 18.7%, respectively.
- The cables and wires segment reported a robust revenue growth of 24% year-on-year, aided by a strong demand from the real estate sector and a pick-up in government capex.
- The company gained market share and reported stable margins in the wires and cables segment, aided by operating leverage benefits.
- While the exports fell by 24% year-on-year due to the roll-over of a large order to the June 2025 quarter, the management expects steady growth in exports, aided by a strong order book from Europe, the Middle East and Australia.
- Other business segments—FMEG(Fast-Moving Electrical Goods) and EPC (Engineering, Procurement and Construction)—also registered a good revenue growth of 33% and 20% respectively on a year-on-year basis.
- A recent Centrum Broking report says that the growth prospects for the wires and cables segment remain strong, led by rising industrial, infra and real estate capex, which will enhance the company’s market leadership. It lists a wide product portfolio as one of the key positives of Polycab.
- It reported a robust performance in the March 2025 quarter with a 27% and 64% jump in revenue and PAT respectively on a year-on-year basis. The numbers exceeded Reuters-Refinitiv estimates by 9.3% and 43% respectively.
- The volume growth in the cables segment was resilient at 13.6% year-on-year, aided by strong growth in both domestic and export markets. On the other hand, the FMEG segment registered revenue growth of 13.3% year-on-year.
- The management has guided for a 25% CAGR in the cables segment’s revenue over 2024-25 and 2027-28, aided by capacity addition and market share expansion.
- The company has planned a capex of Rs.12,000 crore, which will increase cable capacity and support margin improvement. Such capex is expected to be funded by internal sources.
- An Asian Markets Securities report says that the company’s earnings momentum remains strong, and the management’s long-term vision is intact, given its strong capex pipeline. However, the report highlights increased competition as a concern.
- It reported a resilient performance in the March 2025 quarter with revenue and net profit surpassing Reuters-Refinitiv estimates by 7.6% and 12.4% respectively.
- The cable segment reported healthy revenue growth of 34% year-on-year, aided by a strong demand for low-tension and hightension cables and higher retail sales.
- The management has guided an 18% revenue growth in 2025-26 and 20% thereafter, aided by improvement in domestic and export demand from sectors such as renewables, transmission and distribution and data centres.
- Furthermore, the margins are expected to improve after the new greenfield Sanand facility commences operations (expected in 2026-27). The facility will also support the growth of the extra high voltage cables segment, which registered a muted performance in the March 2025 quarter.
- An Elara Capital report is positive on KEI due to sectoral tailwinds, focus on exports and improved sales guidance. It highlights higher capacity utilisation, continued margin improvement, strong cash flow generation and robust domestic demand as key growth catalysts.
- Its revenue and net profit exceeded Reuters-Refinitiv estimates by 5% and 11% respectively in the March 2025 quarter.
- The cables and wires segment revenue grew by 21% year-on-year, aided by strong demand and channel restocking. On the other hand, Lloyd continues its growth momentum with 39% year-on-year growth.
- The company has commissioned its greenfield facility at the Tumkur plant for power & flexible cables, and it has announced additional investments in the plant for larger cables. Such investments are expected to manage capacity constraints and will provide healthy growth opportunities.
- The other business segments, including RACs and Lloyd (refrigerators), are also doing well and are expected to contribute to the growth in the future.
- A Motilal Oswal report lists R&D-led innovation, omni-channel presence, manufacturing excellence and capacity expansion as the key positives.
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