Power, Real Estate, & Data Centers Spark New Growth In Indian Cable Industry
The report mentioned that this comes after a decade of only mid-single-digit volume growth, mainly due to low real estate activity and reduced transmission and distribution (T&D) capital expenditure
The Indian wires and cables (W&C) industry is likely to witness relatively higher growth over the next five years, driven by strong demand across key sectors and rising export opportunities, says a report by Ambit Capital.
The report mentioned that this comes after a decade of only mid-single-digit volume growth, mainly due to low real estate activity and reduced transmission and distribution (T&D) capital expenditure.
It said "A peek at the end application of the wires and cables market indicates that 50 per cent of the demand for end wires and cables is driven by real estate and power (generation, distribution and transmission). End market growth here will be the key to demand growth ahead".
However, things are changing. The next five years are expected to see a positive shift, supported by three key factors, an increase in new real estate launches, rising investments in T&D infrastructure, and strong growth in renewable energy and emerging sectors like data centres.
The report also highlighted that these sectors are now showing clear signs of improvement and are likely to push up the demand for wires and cables.
The end application of wires and cables reveals that nearly 50 per cent of the overall demand comes from real estate and power sectors, which include power generation, distribution, and transmission. So, growth in these two sectors will play a key role in driving the overall demand for the W&C industry.
The real estate sector alone accounts for around 35 per cent of W&C applications. Additionally, cables form almost twice the share of spending in T&D capex compared to normal infrastructure capex.
Another growing segment is data centres, where wires and cables make up about 8-10 per cent of the total capital expenditure. With increasing digitalisation and data usage, this sector is becoming a major new demand driver.
The report added that the exports are also providing a big boost to the Indian W&C industry. Over the last five years, Indian exports have grown to USD 2 billion, showing a strong 18 per cent compound annual growth rate (CAGR).
Indian companies are exporting to regions like the US and the Middle East. Many Indian Companies are helping improve India's competitiveness in the global market.
To tap global demand, especially from the US and Europe, Indian firms are now focusing on getting product-level approvals and are chalking out plans to increase export market share.
Initially, opportunities are likely to come mainly from low-voltage (LV) and medium-voltage (MV) cables, as Indian companies have strong expertise in these segments.
With both domestic and international opportunities expanding, the Indian W&C industry is on track for a stronger and more sustained growth phase in the years ahead.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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