After Paints, Birlas to Enter Wires Business: What's Behind the Expansion Spree

UltraTech Cement's announcement to enter the wires and cables segment has rattled the stocks of existing players. The Aditya Birla Group company, on February 25, said that it plans to spend Rs 1,800 crore over the next 2 years to set up a plant near Bharuch, Gujarat.

The company further said that it aims to meet the growing demand for wires and cables across various sectors, including residential, commercial, infrastructure, and industrial applications.

This is the Aditya Birla Group's second expansion announcement this year after Ananya Birla launched her beauty and personal care brand under Birla Cosmetics. The Group is a $65 billion global conglomerate with a diverse presence across various sectors, including cement, metals, fashion, retail, financial services, chemicals, and telecom. With operations spanning six continents and 40 countries, the group's notable subsidiaries include UltraTech Cement, Hindalco Industries, ABFRL, Aditya Birla Capital, Grasim Industries, and Vodafone Idea Limited, among others.

Why the Cables and Wires Industry?

"The wires and cables industry has witnessed a revenue CAGR of around 13% between FY19 and FY24, and with the migration from the unorganised to the organised market, the outlook continues to remain robust, which provides an attractive opportunity for a new trusted player in the sector," the company said in a statement.

In today’s trading session, stocks of companies like Polycab India (-18.84%), KEI Industries (- 21%), RR Kabel (- 19.92%), and Havells India (- 6.33%) tumbled. Even the shares of UltraTech Cement itself fell by 4.99% to Rs 10,420. The stock markets were closed on February 26 due to Mahashivaratri.

According to analysts, market sentiment was dented over expected competition concerns, but there were also worries that UltraTech Cement allocated a very small amount for the new expansion.

As per the brokerage firm Nuvama Institutional Equities, UltraTech's entry is unlikely to have any significant impact on the FY25–28 earnings of cables and wires players.

"Assuming 60–70% capacity utilisation (CU) in year three, as it builds distribution for wires and secures approvals for various cable SKUs, it will account for less than 5% of the C&W market at that time, in our estimate. Hence, this entry is expected to have a modest impact on C&W industry volumes and margins in the medium term," the brokerage said, as per Mint.

However, Citi estimates that the wires and cables business could generate revenue of over Rs 1,200 crore, representing 14% of UltraTech's forecasted revenue for FY27. It notes that the move would shift the Aditya Birla Group's position as a pure-play cement firm.

Birla Group's Expansions into New Sectors

In recent years, the Kumar Mangalam Birla-led conglomerate has increasingly expanded into new sectors. In November 2024, Chairman Birla announced an investment of $20 billion to scale their business, especially in the manufacturing sector.

He also noted the group’s foray into fashion retail, jewelry retail, and financial services.

Later, in February 2025, his daughter Ananya Birla announced her foray into the beauty and personal care industry with Birla Cosmetics. The venture plans to introduce a range of beauty and personal care brands across India throughout 2025, targeting diverse consumer segments with products including makeup, fragrances, and more.

The company launched Birla Opus paint under its flagship Grasim Industries in February 2024 as India's second-largest paint maker. The company introduced 129 products with over 900 SKUs across various categories. Under the same unit, a year earlier, they had launched Birla Pivot, the B2B e-commerce business unit for metals and building materials.

In 2023, the Group invested Rs 5,000 crore in the new jewelry business, Indriya, and launched four stores in Delhi, Indore, and Jaipur. The brand now aims to reach 100 stores within the next 18 months.

Behind Birla Group's Rapid Expansion

"We want to be number one or two in every business that we are in or get into. So, like they say, scale is in everything, but it's the only thing. Without scale, I think it's very difficult to survive today unless you have something very unique, very high technology, which gives you very high margins. So, scale is very important," the Group Chairman had said at an event in November 2024.

Not just expansion, the conglomerate is also using mergers and acquisitions to expand its capacity and help its business. Recently, UltraTech received approval to buy India Cements. Earlier in March, the CCI approved UltraTech Cement's acquisition of Kesoram Industries' cement business.