UltraTech Cement’s Mcap drops over ₹15,800 crore after THIS announcement | Stock Market News
Wires and cables sector: Shares of UltraTech Cement dropped over five per cent on Thursday, February 27, after the Aditya Birla Group cement maker announced its entry into the wires and cables segment with an investment of ₹1,800 crore to set up a plant in Gujarat. The stock tanked 4.99 per cent to settle at ₹10,420.65 on the BSE. Intra-day, it slumped 6.39 per cent to ₹10,266.60.
On the NSE, it declined 4.68 per cent to ₹10,450. The cement major’s market valuation diminished by ₹15,811.8 crore to ₹3,00,847.41 crore. The large-cap stock emerged as the biggest laggard among the Sensex and Nifty companies.
The announcement led to significant volatility in UltraTech Cement shares and stocks of incumbent players in the wires and cables segment. Shares of key industry players saw a sharper selloff. KEI Industries share price plunged over 21 per cent, RR Kabel stock price dropped 19.5 per cent, Polycab India shares declined 18 per cent, and Havells India shares cracked by over nine per cent.
UltraTech Cement’s big entry into wires and cables
Ultratech Cement announced its entry into the wires and cables segment on Tuesday. To expand its footprint in the construction value chain, UltraTech Cement will invest ₹1,800 crore over the next two years in setting up a plant in Gujarat. According to a company statement, the plant will be set up near Bharuch in Gujarat and is expected to be commissioned by December 2026.
On Tuesday, the Aditya Birla Group firm board approved the proposal to extend its footprint in the construction value chain through its Building Products Division. UltraTech said this is in accordance with the “company’s strategy to strengthen its position as a comprehensive Building Solutions provider. ” Last year, Aditya Birla Group entered the decorative paints segment by launching Birla Opus.
The Indian cables and wires market, valued at approximately ₹80,000 crore in FY24, has demonstrated a robust compound annual growth rate (CAGR) of ~nine per cent over FY14-24. The wires and cables sector’s average EBITDA margins have ranged between 7-13 per cent over FY20-FY24, with a return on capital employed (RoCE) of 13-19 per cent during the same period.
