Polycab, KEI, Finolex Cables shares down up to 50% from peak; Are valuations now cheap?

Shares of Wires and Cables Manufacturers KEI Industries Ltd., Polycab India Ltd. and RR Kabel Ltd. are down 18%, 15% and 12% respectively, after India’s largest Cement company UltraTech Cement Ltd. announced a foray into this space, with an ₹1,800 crore investment over the next two years.UltraTech’s shares are down 6% as well, marking their biggest single-day fall in three years.

In an interaction with CNBC-TV18, Anil Gupta, the CMD of KEI Industries said that the cables and wires industry has enough space for a new entrant and that he does not believe UltraTech will disrupt the market by slashing prices.

He expects UltraTech to take a minimum of three years to start production and another three to four years for brand building. He also does not expect KEI’s margins to come under pressure.
RR Kabel’s management also told CNBC-TV18 that UltraTech’s entry into the market is not as bad as the market is fearing.

With this fall, shares of Polycab, KEI Industries and Havells have corrected between 30% to 40% from their respective peaks, those of RR Kabel and Finolex Cables have halved from their recent highs.

Stock	Fall From Highs
Polycab	-35%
Havells	-30%
Industries are located in Industries	-38%
RR Table	-49%
Finolex Cables	-51%

With stocks nearly halving from their peak, have valuations now turned cheaper? Here is a look at individual names:

• Polycab: The stock is trading at a financial year 2025 price-to-earnings multiple of 39.5 times, which is still higher than the stock’s five-year average price-to-earnings multiple of 31.5 times.
• Havells India: The stock is trading at a financial year 2025 price-to-earnings multiple of 62 times, which is in-line with its five-year average.
• Industries are located in Industries: Despite the biggest fall among its peers on Thursday, KEI Industries still trades at 44.5 times financial year 2025 price-to-earnings, which is higher than the five-year average of 28.5 times.
• Finolex Cables: The stock trades at 18.3 times financial year 2025 price-to-earnings, which is higher than the 15.7 times average multiple over the last five years. This, even after the stock has halved from its peak.

Brokerage firm HSBC believes that UltraTech’s foray is likely to have a material impact on the growth of incumbents, as well as on their margins beyond financial year 2027.

HSBC has cut Polycab’s price target by 20% to ₹6,250 from ₹7,840 earlier. It has cut KEI’s price target by 23% to ₹3,450 from ₹4,500. Havells price target has been cut by 6.5% to ₹1,730 from ₹1,850 earlier. While HSBC has a “buy” rating on Havells and Polycab, it has a “hold” rating on KEI Industries.