Aditya Birla Group announced its foray into the wires and cables business with the launch of Ultravolt on September 3, with an initial outlay of Rs 1,800 crore. Making a strong pitch for the business, the company said Ultravolt would be the second-largest player in the wires segment by capacity at launch, and aims to become one of the top two players in the segment within five years.But the announcement did not bode well for the existing players in the segment, as was visible in their stock prices. Polycab India, which holds around a 22% market share of the domestic wires and cables market, tanked 15% in September. KEI Industries has nosedived nearly 22%, while Havells India and RR Kabel have dropped 14-18%.According to an Aditya Birla Group statement, India’s wires and cables industry has reached a market size of Rs 1,24,085 crore and is projected to grow at 14.50% annually up to 2035, led by housing, infrastructure, industrial investment, and electrification. The strong growth outlook makes the group’s entry into the sector timely.The arrival of a new player has unsettled existing companies, but experts say the bigger near-term concern is margin pressure rather than a sharp hit to revenues. Copper prices could also be a key factor in determining the impact.Integration with UltraTech, HindalcoThe Aditya Birla Group has businesses across several sectors, allowing it to use existing manufacturing and distribution networks that most companies do not have. In this case, Hindalco Industries and UltraTech Cement give it a key advantage.Take Hindalco, for instance, which mines and refines copper: a major raw material used to make wires and cables. Companies such as KEI Industries, Havells, RR Kabel and Polycab source a large part of their copper from domestic players like Hindalco and Vedanta, as well as international traders and suppliers. Ultravolt, meanwhile, will have direct access to Hindalco, which could, in theory, give it a lower-cost source of copper.“The Hindalco relationship gives Ultravolt access to high-purity copper and greater supply-chain control but not a guaranteed structural price advantage as copper is a globally traded commodity,” according to Manish Valecha, Co-head of Research at Anand Rathi Institutional Equity. However, in an environment where copper prices have already shot through the roof, this accessibility may come in handy for Ultravolt.Story continues below this adCopper futures on the London Metal Exchange rose to a record high of around $14,820 per tonne, up to a 45% rise from last year. The metal is critical not only for industrial demand, but is also essential for AI infrastructure.Meanwhile, UltraTech’s massive network of dealers, contractors, and construction clients provides an even bigger advantage. In fact, this factor allowed the company to become the second-largest player by capacity in the industry at launch.The company plans to pursue a pan-India rollout from inception rather than a phased regional approach, targeting over a lakh retailers, over 5,000 UltraTech Building Solutions (UBS) outlets, and spanning districts and 6,000 pin codes at launch, a report by Nomura noted.“Complementing distribution, the company has launched an electrician engagement program — having onboarded 1,600+ electricians pre-launch — with a target to train over 40,000 electricians in the coming year under the Skill India initiative with ESSCI (Electronics Sector Council of India),” the report added. These electricians will be more likely to be comfortable using Ultravolt products, helping build a sticky distribution pipeline.Existing paints playbookStory continues below this adWhen a big conglomerate with deep pockets enters an industry, it can initially unsettle existing players. The concern is that its financial strength will allow it to scale up quickly and take market share from established companies. When Reliance Jio launched in 2016 with the promise of free internet, it had sent the share prices of existing players such as Bharti Airtel and Vodafone Idea crashing up to 10% within a single day.In fact, the Aditya Birla Group had had a similar effect on the paints industry with the launch of Birla Opus Paints in February 2024. The brand had launched with a “blitzkrieg” strategy, driven by aggressive pricing, massive capital expenditure commitments, and a host of benefits to dealers and distributors, helping it capture a 5-6% market share in the decorative paints segment in a short time. UltraTech’s massive distribution network was a key ingredient in that case.While Asian Paints remains the dominant player in the segment with an over 50% market share, its revenue growth has faltered to negative or low single digits year-on-year, compared to 5-20% growth seen between FY19-FY23. In comparison, Birla Opus’ revenue jumped 52% in FY26 as it continued to ramp up.Experts believe the group may bring this aggressive strategy again with Ultravolt, as suggested by the management’s ambitions.Was the market reaction justified?Story continues below this adThe consensus is that Ultravolt’s margins will impact existing players. The effect is likely to be first seen in margins getting aggressively squeezed.“The more immediate risk is margin pressure. Incumbents may have to increase dealer incentives, advertising and promotional spending to protect their retail position and limit price hikes, particularly with copper prices rising,” explained Valecha of Anand Rathi.“This is particularly relevant for Havells and the house-wire portion of Polycab/KEI. So, the near-term revenue disruption looks manageable, while margin pressure is the bigger concern,” he added. Nomura has a similar view and expects Ultravolt to notch a market share of 6-7% by FY30, provided market conditions remain constructive.However, the group’s successful aggressive push in the paints sector may not lead to a similar outcome in the wires and cables segment. “Paints are primarily a brand or distribution-driven consumer category, while wires and cables become progressively more technical as it moves from house wires into MV (medium voltage), HT (high tension), EHV (extra high voltage), and specialised cables. Higher-voltage cables require certifications, technical approvals, customer references, and established execution history,” according to Valecha.Story continues below this adThese barriers cannot be broken by simply adding distributors, so it depends on how fast Ultravolt can ramp up its capacity and achieve expertise in specialised products providing higher margins.“The real test will be dealer ramp-up, pricing, and market-share gains over the next 2-3 quarters,” noted Ashutosh Murarka of Choice Institutional Equities.