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What is the story about?
Shares of Bajaj Electricals Ltd. surged as much as 11% on Tuesday, January 20, after the company announced its entry into the wires segment.
The company plans to foray into wires as a new business line under its Lighting Solutions segment, citing rising demand in the wires industry.
Bajaj Electricals said the move is aimed at expanding and diversifying its business operations to drive sustainable long-term growth.
Management said the product launch is expected shortly, following which the company will assess market response to determine the level of investment required.
Currently, margins in Bajaj Electricals' Lighting Solutions segment stand at around 10%, broadly in line with margins of peers in the cables and wires space, which range between 10% and 12%.
The wires segment is seen as relatively less competitive compared with cables and also offers scope for higher-margin exports. Within the overall cables and wires market, building wires account for about 28-30% of the total segment.
Housing wire-focused players such as RR Kabel, Havells and Finolex Cables derive a larger share of their cables and wires portfolio from wires than cables.
Brokerage firm Motilal Oswal estimates a revenue CAGR of 15% for the wires and cables segment over FY25-27.
At Havells, high-margin housing wires contribute nearly 60% of total cables and wires revenue.
RR Kabel has indicated that by the end of FY26, the wire-to-cable mix for both domestic and export markets is expected to shift to 65:35, with wires likely to see strong growth in Q4.
Finolex Cables, meanwhile, derives about 95% of its revenue from electrical wires and cables.
The company plans to foray into wires as a new business line under its Lighting Solutions segment, citing rising demand in the wires industry.
Bajaj Electricals said the move is aimed at expanding and diversifying its business operations to drive sustainable long-term growth.
Management said the product launch is expected shortly, following which the company will assess market response to determine the level of investment required.
Currently, margins in Bajaj Electricals' Lighting Solutions segment stand at around 10%, broadly in line with margins of peers in the cables and wires space, which range between 10% and 12%.
The wires segment is seen as relatively less competitive compared with cables and also offers scope for higher-margin exports. Within the overall cables and wires market, building wires account for about 28-30% of the total segment.
Housing wire-focused players such as RR Kabel, Havells and Finolex Cables derive a larger share of their cables and wires portfolio from wires than cables.
Brokerage firm Motilal Oswal estimates a revenue CAGR of 15% for the wires and cables segment over FY25-27.
At Havells, high-margin housing wires contribute nearly 60% of total cables and wires revenue.
RR Kabel has indicated that by the end of FY26, the wire-to-cable mix for both domestic and export markets is expected to shift to 65:35, with wires likely to see strong growth in Q4.
Finolex Cables, meanwhile, derives about 95% of its revenue from electrical wires and cables.
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