After expanding at ~13% over FY23–25 to reach a market size of about Rs 900 billion, the industry is positioned to maintain a similar growth trajectory over the medium term, supported by visibility across power, renewables, real estate, railways, data centres and manufacturing-led investments.
The demand environment remains robust, with power generation, transmission and distribution projects emerging as key volume drivers. This is complemented by accelerating investments in renewables, metro and rail infrastructure, defence and electric vehicles.
Importantly, the sector’s growth is not narrowly concentrated; instead, it benefits from diversified end markets, which lends resilience across cycles.
On the cost side, copper and aluminium prices—key raw materials—have risen meaningfully in 2025, with prices up ~10% and ~8% year-to-date, respectively. However, the C&W segment has demonstrated an effective pass-through mechanism, enabling manufacturers to preserve operating margins despite commodity volatility.
Exports have emerged as a structural growth lever. India has been a net exporter of cables and wires since FY20, with exports growing at ~19% CAGR over FY20–25.
In the first half of FY26 alone, exports rose ~30% year-on-year to Rs 118 billion, driven by demand from regions investing heavily in grid modernisation, renewables and data centres. While trade-related disruptions, including tariff actions in certain markets, pose near-term challenges, underlying global demand trends remain supportive.A notable medium-term tailwind is the rapid expansion of data centres in India. The domestic data centre market, currently estimated at around USD 10 billion, is projected to grow at ~26% CAGR over the next five years, backed by digitalisation, cloud adoption and AI workloads.
Cables typically account for 5–10% of data centre project costs, translating incremental capacity additions directly into demand for high-capacity power, control and fibre-optic cables.
Looking ahead, the industry is expected to grow at ~13–14% CAGR over FY25–30, taking the market size close to Rs 1.9 trillion. With growth projected at 1.5–2.0 times real GDP, stable margins aided by commodity pass-through, and increasing export competitiveness driven by quality improvements and global certifications, the C&W sector offers a compelling medium-term opportunity aligned with India’s infrastructure and electrification priorities.
Polycab India: Buy| Target Rs 9,110
Polycab continues to deliver strong momentum in its core Cables & Wires (C&W) business, supported by robust demand across power, infrastructure, real estate, and industrial capex.
Management reiterated that the company is growing 1.5x faster than industry levels, aided by its dominant market share, 2–3x capacity advantage, and extensive distribution network.
Margins in C&W remain healthy at 13–15%, underpinned by a favourable mix and operational efficiency. The FMEG segment, contributing 7–8% of revenue, is progressing steadily, with margin expansion expected through operating leverage and a focused six-category strategy.
The EPC business remains strategically relevant, backed by a healthy INR80b BharatNet order book. Management remains confident of sustaining double-digit growth amid rising renewable and data centre investments. We estimate revenue/EBITDA/EPS CAGR of 18%/22%/21% over FY25–28.
KEI Industries: Buy | Target Rs 4,960
KEI Industries reported a robust 2QFY26 performance, with revenue rising ~19% YoY to INR27.3b, led by ~22% growth in the Cables & Wires (C&W) segment. EBITDA grew ~20% YoY to INR2.7b, while PAT rose ~31% YoY to INR2.0b, supported by higher other income.
Management highlighted a four-month delay in Phase I of the Sanand project due to rains and labour shortages, now expected to be commissioned by Nov’25, contributing from 4QFY26. Phase II faces a nine-month delay and is set for 4QFY27 commissioning.
Despite delays, KEII maintained its FY26 growth guidance of ~18% and 20%+ for FY27-28, focusing on maximising capacity utilisation. We project a revenue/EBITDA/PAT CAGR of ~18%/21%/21% over FY25-28, driven by strong C&W growth (~19%), stable margins, and a decline in EPC revenues (~10% annually).
(The author is Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd)
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
