Polycab, KEI Industries Shares Decline Up to 6% on Rising Copper Prices

Market Update: Wire and Cable Makers Decline Amid Copper Price Rise

Polycab and KEI Industries, two prominent wire and cable manufacturers, experienced significant declines in their share prices on the National Stock Exchange (NSE) in Tuesday's trade. The decline was attributed to the rise in copper prices, a key raw material used in the manufacture of wires and cables.

KEI Industries shares touched an intraday low of Rs 4,429 per share, a 7.53 percent decline, before settling at Rs 4,554 per share, lower by 4.92 percent. This represents a one-month low for the company's stock, which has been declining for the last two trading sessions.

Similarly, Polycab shares fell 6.62 percent to an intraday low of Rs 7,684 per share, before settling at Rs 7,725 per share, down 6.12 percent. The company's stock has been declining for the last three trading sessions, with a nearly 10 percent decline during this period.

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The rise in copper prices is attributed to better-than-expected economic data from China, the top consumer of the metal, which led to an increase in futures contracts on the London Metal Exchange. Additionally, dip-buying by Chinese investors after weakness in the previous session contributed to the sentiment.

Industry analysts have raised concerns about near-term headwinds in the cables and wires segment, citing concerns around volume growth, channel stocking, and commodity volatility. Polycab, in particular, has a significant raw material cost exposure, with copper accounting for 50-60 percent of its overall costs. However, the company has passed on the increase in copper prices to its customers in the third quarter, which may help recover margins in the ongoing fourth quarter.