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Universal Cables Limited (UCL), one of the leading Indian cable manufacturing companies, has burst onto the scene with a aggressive expansion plan in place, even as it contemplates serious market volatility and other industry headwinds.
Capacity Expansion Reflects Growth Aspiration
On February 18, 2025, UCL made a major hike in its capital expenditure plan, increasing its total outlay from INR 277 crore to INR 482 crore. This increased investment is for augmenting production capacities at its Satna (Madhya Pradesh) and Verna (Goa) plants. The annual capacity of the Satna plant's production of power cables—low, medium, high, and extra-high voltage—will go up from 21,450 km to about 31,575–32,850 km. The Verna plant's capacity for insulated winding wires, building wires, and multicore flexible cables will increase from 75,000 km to around 250,000 km a year. The new capacities are expected to come on stream in phases between July 2025 and March 2026.
UCL credits this expansionist drive to strong demand both in the domestic and international markets, especially for power cables required in high-value energy infrastructure projects. The firm intends to fund the project with a combination of long-term borrowings and internal accruals.
Market Performance: A Turbulent Environment
In spite of its plans for expansion, Universal Cables has been confronted with ongoing difficulties in the stock market. At the time of April 7, 2025, the shares of the company reached a new 52-week low price of Rs. 432.35, down 47.22% on a year-to-date basis. In three consecutive days, the stock fell by 13.8%, lagging its sector and trading below all significant moving averages—a clear reflection of bearish sentiment. The financial fundamentals of the company have also stretched, with a negative CAGR in operating profits and a 6% return on equity, which is very low.
This decline is happening against the backdrop of a wider industry slowdown, with the cable industry itself losing 3.62% in the last one year. Universal Cables' performance is in stark contrast to the Sensex, which, though volatile, has demonstrated more tenacity.
Recent Corporate Developments
UCL has ensured regulatory adherence and transparency through periodic updates about board meetings, financial performance, and trading window closures. Unaudited results of the company for the quarter and nine months ended December 31, 2024, were announced in February 2025, with continued operational and financial difficulties reflected therein.
Outlook
Universal Cables' aggressive capacity expansion, in spite of present market headwinds, reflects its optimism regarding long-term growth for the power cable industry. As the company's stock performance is still in doldrums, proactive investment by the management represents a strategic wager on future demand and market resurgence.
Sources: Moneycontrol, MarketsMojo, Wire & Cable India, Economic Times
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