Havells’ Cable Boom: Can It Defend Margins as Polycab and Birla Expand?

Havells’ biggest source of growth is becoming a larger part of its business just as competitors are committing more money to the same market.

Cables produced ₹2,999 crore of revenue in the September quarter, up 47.9% from a year earlier. They accounted for nearly 47% of Havells’ standalone sales and approximately 59% of the company’s additional revenue. Yet cable segment profit increased only about 9.4%, to ₹304 crore, as its margin fell to 10.1% from 13.7%.

Those numbers make the competitive question consequential. Havells needs to capture India’s demand for electrical infrastructure while protecting what it earns from that growth. Polycab is investing to reinforce its leadership, KEI and RR Kabel are scaling, and Aditya Birla Group has launched Ultravolt through UltraTech Cement.

The latest margin decline does not establish that these rivals have already forced Havells to cut prices. The company attributes cable-margin pressure to aluminium-price movements. Ultravolt launched on September 3, near the end of the quarter.

The issue is what happens as an expanding group of organised suppliers competes for customers, distribution and returns.

WHAT IS DRIVING HAVELLS’ CABLE GROWTH?

Havells says cable revenue growth was led by commodity-linked price increases and a shift towards larger-sized cables. Its update does not quantify the separate contributions of volumes, prices and product mix. The 47.9% increase therefore cannot be read as equivalent growth in the quantities sold.

This distinction matters in a business where metal prices influence the value of the product passing through the accounts. Revenue can expand without a corresponding increase in the profit retained.

Global manufacturers make that distinction explicit. Prysmian’s first-half 2026 presentation reported total revenue growth of 16.4% alongside organic growth of 7.2%. Its organic measure adjusts for metal prices, currency and changes in the business perimeter; it is not simply a volume-growth measure. The figures illustrate why headline cable sales need unpacking, rather than providing a direct benchmark for Havells.

Havells’ own numbers show the gap. Cable revenue increased by approximately ₹971 crore, while segment profit rose by ₹26 crore, using the rounded figures in its presentation.

There is also a balancing explanation. Havells says falling aluminium prices during Q2 weighed on margins and that first-half cable contribution margins of around 15% were consistent with the long-term average. Contribution margin is a separate company-defined measure from the reported segment profit margin.

The quarter consequently supports scrutiny of profitability, while leaving the extent and duration of the pressure open.

WHY BIRLA’S ENTRY MATTERS

Ultravolt introduces a challenger with ambitions extending across production, distribution and relationships with people who influence purchases.

At its September 3 launch, Aditya Birla Group described a ₹1,800 crore investment commitment, a manufacturing facility at Jhagadia in Gujarat and a plan to reach more than one lakh retailers. It also intended to use over 5,000 UltraTech Building Solutions outlets to support availability. These were stated rollout plans, rather than verified completed distribution coverage.

That creates a potentially useful route into the construction market. UltraTech already has relationships with home builders, contractors and other participants whom a new electrical brand needs to reach.

The group described Ultravolt as the second-largest wires player by capacity at launch and set an ambition to become a top-two player within five years. Capacity ranking should not be confused with market share, sales or achieved profitability.

For Havells, the analytical question is whether additional capacity and distribution reach will make it more expensive to win and retain business. That could involve stronger service, wider availability, product development or greater channel investment. The available disclosures do not establish an industry-wide price war.

POLYCAB AND OTHER INCUMBENTS ARE EXPANDING TOO

The competitive pressure extends beyond the new entrant.

In its FY26 annual report, Polycab claimed approximately 30–31% of the domestic organised wires-and-cables market. Chairman Inder T. Jaisinghani described around ₹1,500 crore invested during the year under its Project Spring framework, alongside continued investment in capacity, automation and operating efficiency. The market-share figure is the company’s estimate.

Polycab’s position matters because Havells is competing with an established supplier that is still building scale. A familiar brand and an existing dealer network do not make the next order automatic.

KEI’s FY26 report describes expanded capabilities at Sanand across low-, high- and extra-high-voltage cables, alongside a ₹600–700 crore annual capex programme. Its expansion illustrates how competition reaches beyond household wiring into industrial and infrastructure applications.

RR Kabel’s July 27 presentation supplies another useful counterpoint. In Q1 FY27, its wires-and-cables revenue rose 57%, while segment profit increased 105% and the segment margin reached 9.9%. That was an earlier quarter with a different business mix, so it cannot be treated as a like-for-like comparison with Havells’ September results. It does show that rapid growth and improved profitability can occur together.

Finolex Cables is investing in specific opportunities too. Its FY26 annual report described ordering a second E-beam solar-cable line to double capacity in that category, alongside expanding industrial-cable capabilities.

These businesses are not identical. Their exposure to retail wires, industrial cables, exports and specialised products differs. Their investments nevertheless create more choices for customers across the wider market in which Havells operates.

THE COUNTERCASE: A BIGGER ORGANISED MARKET

Havells has already addressed the prospect of a large new entrant.

On its April 22 earnings call, an analyst asked whether a cement company entering housing wires could increase pressure on industry pricing. Anil Rai Gupta, Havells’ chairman and managing director, argued that the industry had previously absorbed new players as business shifted from smaller and unorganised suppliers towards organised brands. He emphasised innovation, brand building and distribution as competitive strengths.

That is a credible counterargument to assuming every entrant’s gain must be Havells’ loss. A growing market and movement towards organised suppliers could allow several established brands to expand.

Havells is investing as well. On the same call, Gupta identified about ₹800 crore of cable-and-wire investment in the financial year and discussed capacity additions. Its October update puts expected company-wide FY27 capex at ₹1,400 crore, primarily for cable capacity and a new research-and-development centre.

The company’s response therefore includes expanding its own ability to serve demand, rather than relying solely on existing capacity.

WHAT WILL SHOW WHETHER THE GROWTH IS PAYING?

Revenue, margins and cash generation will need to be assessed together.

Havells reported ₹651 crore in standalone net profit for the first half, alongside negative operating cash flow of ₹160 crore. Changes in operating assets and liabilities absorbed ₹1,091 crore. These are company-wide figures and cannot all be assigned to cables.

Nor does a larger inventory balance by itself establish unsold stock. Havells says inventory rose mainly in cables in line with revenue growth and commodity prices. Reported inventory days and net working-capital days were lower than a year earlier.

The useful test is whether new capacity and commercial investment produce sustained orders, adequate margins and cash returns. Faster sales alone cannot settle that question, especially when commodity prices influence the revenue line.

Havells enters this contest with a substantial cable business and strong growth. Its rivals are investing against many of the same opportunities. The next phase will reveal how effectively the company can turn its share of India’s electrification demand into profits worth defending.