The Indian electrical equipment and infrastructure landscape is bracing for a robust second quarter in the 2026-27 financial year, with the wires and cables (C&W) segment emerging as a primary beneficiary of global commodity price shifts and domestic infrastructure tailwinds. According to a comprehensive preview report by InCred Equities, the sector is anticipated to witness a significant surge in value-led growth, underpinned by the efficient pass-through of rising copper and aluminium costs to end consumers. While volume growth is expected to remain in the low to mid-single-digit range, the financial performance of key players suggests a resilient margin profile and a strengthening of balance sheets across the board.
Industry analysts highlight that Diamond Power Infrastructure Limited and Finolex Cables are likely to emerge as the top performers of the quarter, outpacing their industry peers. However, the optimism extends across the sector, with market leaders such as Polycab India, KEI Industries, and RR Kabel also projected to report double-digit growth. This collective upward trajectory is being driven by a combination of high-value project executions and a steady demand from the real estate and industrial sectors. Despite the entry of new competitors, such as UltraTech Cement’s cable brand ‘Ultravolt’, the established players appear to have maintained their market dominance without any material impact on their market share or pricing power.
The Macroeconomic Context: Commodity Prices and Infrastructure Demand
The performance of the wires and cables sector is intrinsically linked to the price movements of base metals, particularly copper and aluminium, which constitute the bulk of the raw material costs. Over the past six months, global prices on the London Metal Exchange (LME) have shown volatility with an upward bias. For Indian manufacturers, the ability to pass these costs onto the consumer is a critical indicator of pricing power. In the second quarter of FY27, this pass-through mechanism has been particularly effective, leading to "value-led growth." This means that even if the actual length of cable sold (volume) grows modestly, the revenue generated (value) increases significantly due to the higher price per unit.
Beyond commodity prices, the broader push for infrastructure development in India continues to provide a fertile ground for the C&W segment. The government’s focus on the "Viksit Bharat 2047" vision has accelerated investments in the national power grid, renewable energy integration, and urban mass transit systems. Furthermore, the burgeoning data center industry and the expansion of 5G networks have created a specialized demand for communication cables, a niche where companies like Finolex Cables have a traditional stronghold.
Polycab India: Maintaining Leadership Amidst Margin Normalization
Polycab India, the country’s largest manufacturer of wires and cables, is expected to maintain its aggressive growth posture. Analysts project a revenue surge of nearly 39% on an annual basis for the second quarter. This growth is anticipated to be broad-based, spanning its core cables and wires segment, as well as its Fast-Moving Electrical Goods (FMEG) and Engineering, Procurement, and Construction (EPC) divisions.
However, the report notes a nuance in Polycab’s profitability metrics. While the company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is expected to jump by 20% year-on-year, the EBITDA margin is projected to contract by approximately 215 basis points to 13.6%. This decline is not attributed to operational inefficiencies but rather to a "high base effect" from the previous year, during which the company benefited from significant inventory gains. Despite this margin normalization, Polycab’s Profit After Tax (PAT) is still expected to grow by a healthy 22% for the quarter. On the stock market, Polycab shares reflected this confidence, closing at ₹8,250 on October 9, marking a 1.21% daily gain.
KEI Industries: Strategic Product Mix Enhances Profitability
KEI Industries is carving out a niche for itself through a strategic focus on its product mix. For Q2 FY27, the company is expected to report a 27% increase in revenue. The standout figure for KEI, however, is the projected 48% annual growth in EBITDA. This outsized growth in earnings relative to revenue suggests a significant improvement in margins, which are expected to reach 11.5%, up from 9.9% in the same period last year.
The margin expansion is largely credited to a shift toward high-margin institutional orders and specialized extra-high voltage (EHV) cables. As the Indian power sector transitions toward higher voltage transmission to reduce losses, KEI’s technical expertise in this area provides a competitive edge. The company’s PAT is expected to grow by 40% year-on-year, making it one of the most profitable players in the segment in terms of growth rate.
RR Kabel: FMEG Expansion and Quarterly Profit Fluctuations
RR Kabel is projected to match Polycab’s revenue growth at 39% for the quarter. The company has been aggressively expanding its footprint in the FMEG sector, which includes fans, lighting, and small appliances. This segment is expected to grow by 21% year-on-year, providing a diversified revenue stream alongside its core C&W business.
While the annual EBITDA growth is pegged at 48%, RR Kabel may face some short-term pressure on its bottom line. InCred Equities forecasts a 16% decline in PAT on a quarterly basis (QoQ), likely due to increased marketing spend and the stabilization of new production lines. Nevertheless, the long-term growth story remains intact, with the stock closing at ₹2,705.30, up 0.46% on the latest trading day.
Finolex Cables and Diamond Power: The Quarter’s Top Picks
Finolex Cables is anticipated to be an outperformer with a 38% annual growth in revenue. The company is benefiting from a dual-engine growth model: its traditional electrical cable segment is riding the real estate wave, while its communication segment is capturing the digital infrastructure boom. With an expected EBITDA margin of 10.9% and a PAT growth of 10%, Finolex is seen as a stable, value-driven play for investors.
Diamond Power Infrastructure Limited, on the other hand, represents the momentum play in the sector. The company has seen a remarkable turnaround in recent years and is expected to maintain its strong trajectory in Q2. Its focus on the Medium Tension (MT) and High Tension (HT) segments is perfectly aligned with the current cycle of industrial expansion and power distribution upgrades. With a robust order book and efficient execution, Diamond Power is expected to maintain margins around 11.2%. The stock’s performance on the BSE, closing 1.71% higher at ₹378.15, underscores the market’s high expectations for its upcoming results.
Chronology of Sector Development and Competition
The current strength of the C&W sector is the result of several years of consolidated growth and policy support.
- 2023-2024: The industry began recovering from supply chain disruptions, focusing on domestic capacity expansion under the ‘Make in India’ initiative.
- Early 2025: A sharp rise in copper prices forced companies to adopt dynamic pricing models, which have now become standard practice.
- Late 2025: UltraTech Cement announced its entry into the cable market with ‘Ultravolt’, sparking fears of a price war.
- Q1 FY27: Companies reported strong volume growth as the real estate sector hit a multi-year high.
- Q2 FY27 (Present): The sector is now shifting from volume-driven growth to value-driven growth, as the benefits of premiumization and commodity pass-throughs take effect.
The entry of UltraTech’s ‘Ultravolt’ was initially viewed as a potential disruptor, given UltraTech’s massive distribution network. However, the InCred report suggests that the "moat" built by specialized cable manufacturers—consisting of technical certifications, specialized manufacturing processes, and long-standing relationships with electrical contractors—remains difficult to breach for a new entrant focused on a general construction audience.
Implications for the Broader Economy and Investors
The projected success of the wires and cables sector serves as a barometer for the broader Indian economy. Strong performance in this segment typically precedes or accompanies growth in industrial production, urban development, and energy consumption. For investors, the sector offers a hedge against inflation through its pricing power and a growth play on India’s infrastructure story.
Analysts suggest that while the "easy gains" from inventory fluctuations may be tapering off—as seen in Polycab’s margin outlook—the fundamental demand remains structural. The transition toward green energy, including the wiring of massive solar parks and the installation of Electric Vehicle (EV) charging stations, represents the next frontier for these companies. As Q2 results are formally announced in the coming weeks, the focus will likely remain on order book visibility and the management’s commentary on the stability of raw material prices for the remainder of the fiscal year.
