New Delhi [India], February 27 (ANI): India’s cable and wire industry has significant growth potential in exports, amid a balanced demand-supply scenario in the domestic market. Some companies may choose to allocate their additional capacities to meet export demand, according to a report by Nuvama Research.
It said, “The industry has significant growth opportunity in exports and hence some players may be able to divert capacities, thus further limiting the impact of such new additions”.
The report also noted that one of the key trends observed in the industry is the shift from unorganised to organised market players. The organised segment’s market share has likely increased from 68 per cent in FY19 to around 73 per cent in FY24. This shift is expected to continue, driven by the competitive environment among major players.
In the domestic market cables and wires (C&W) industry is expected to achieve a balanced demand-supply scenario over the next three to four years.
The report stated this projection is based on publicly announced capital expenditures (capex) by leading companies and an estimated 13 per cent compound annual growth rate (CAGR) in industry revenue, similar to the trend observed between FY19 and FY24.
It said, “We estimate C&W industry is heading for a balanced demand-supply scenario over next three-four years based on publicly announced capex by leading players and 13 per cent CAGR in industry revenue (similar to FY19-24)”.
The report highlighted that a key factor in this transition is the expected capacity utilization (CU) in the third year, which is estimated to be around 60-70 per cent. This will be driven by companies expanding their distribution networks for wires and obtaining necessary approvals for various cable stock-keeping units (SKUs).
Despite this growth, the estimated capacity additions will account for less than 5 per cent of the total C&W market by that time. As a result, the impact on the industry’s overall volume and profit margins in the medium term is expected to be modest.
Overall, the C&W industry is poised for steady growth with increasing competition among organised players, rising export opportunities, and a transition towards a more structured market environment. (ANI)
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