Kotak Institutional Equities suggested a 'Sell' rating on Polycab India Ltd, R R Kabel Ltd and KEI Industries Ltd, even as it believes wires and cables (W&C) sector may continue to grow at 1.5 times the real GDP growth, in line with the historical trend. Valuations are full, Kotak warned. This is especially after considering the downside risk to profitability if commodity prices correct, and pricing discipline gets challenged by UltraTech’s entry, which is likely by mid-August 2026. 

"While exports, data centers, private sector capex, and transmission are likely to see tailwinds, demand momentum in power generation/distribution and government capex (infra) could moderate," it said.

Over FY2026-29, Kotak forecast 10 per cent volume CAGR for industry, led by 9 per cent domestic and 20 per cent exports growth. It said a significant capacity additions by incumbents and new entrants could lead to margin compression, but supply should get absorbed over time, if industry growth sustains. 

It suggested fair values of Rs 4,200 for KEI Industries and Rs 1,850 for RR Kabel.  

"We raise target multiple for Polycab to 33 times June 2028E PE (FV of Rs 8,700; 26 times earlier) to align with our long-term industry forecasts and broader pecking order within the space," Kotak said.

While the newsflow on private sector capex are mixed, wires and cables companies are indicating a pick-up in demand. Power transmission, Kotak said, is historicallya low contributor to W&C demand but is likely to witness a step-up, given planned increase in capex spends, and increasing preference for underground lines, that can benefit EHV cables. 

Kotak said the acceleration in demand during FY2021-24 phase was likely driven by a rise in government’s capex, whereas FY2026 growth was led by a jump in renewables capacity addition and DISCOM capex under revamped distribution sector scheme. 

"Slowdown in government’s capex (high base, populist schemes, and a stretched fiscal amidst Middle East crisis) and a high base in renewables/DISCOM capex could be near-term headwinds. A decline in new real estate launches could impact wires demand with a lag," Kotak said.