Shares of cable and wire manufacturers such as Polycab India Limited and KEI Industries Limited are expected to remain in focus after a channel check by JM Financial pointed to a slowdown in distributor demand and inventory buildup concerns across the sector.

According to the brokerage’s field feedback, volume growth across the cable and wire industry has softened recently as distributors have turned cautious about increasing inventory levels. The hesitation largely stems from the risk associated with volatile copper prices, which form a key input cost for cable manufacturers. If copper prices decline after distributors have stocked inventory at higher price levels, it can lead to potential losses due to inventory revaluation.

The current inventory dynamics partly reflect a demand pull-forward earlier in the year. Distributor demand remained strong in January 2026 as dealers stocked up in anticipation of price increases announced by manufacturers. This led to significant inventory accumulation across distribution channels during that period.

However, as the pace of price hikes slowed in subsequent weeks, distributors began reducing their stocking activity. This shift suggests that February 2026 may witness softer off-take from the channel compared with the elevated levels seen in January. The moderation does not necessarily indicate a structural slowdown in end demand but rather reflects an inventory adjustment cycle after earlier front-loading of purchases.

Another trend emerging from the channel checks is the increasing price sensitivity among distributors and contractors. Some distributors are reportedly shifting toward smaller or regional cable brands that offer products roughly 8–10% cheaper than larger branded players. Such downtrading often occurs during periods when end customers become more cost-conscious, particularly when raw material prices remain volatile.

On the project execution side, engineering, procurement and construction contractors are also facing margin pressure. Many EPC firms are finding it difficult to pass through higher material costs to project owners, especially in contracts where pricing terms are fixed. As a result, some contractors have reportedly delayed procurement decisions or slowed project execution.

Construction activity disruptions have added another layer of weakness. Certain regions in western and northern India saw partial stoppage or slower progress in construction activity during February 2026, according to distributor feedback cited in the channel checks. Since infrastructure and real estate projects form a large part of cable demand, any temporary slowdown in project execution can directly affect short-term sales volumes for cable manufacturers.

Market Impact on India

For the broader Indian market, the developments highlight how commodity price volatility can ripple through industrial supply chains. Even when underlying infrastructure demand remains intact, inventory adjustments and price uncertainties can create short-term volatility in manufacturing sectors tied closely to raw material cycles.

Sector Impact

Within the electrical equipment and cable manufacturing sector, the near-term outlook appears mixed. Large organised players with stronger brand equity and distribution networks may still maintain steady demand over the medium term. However, short-term volume momentum could moderate as distributors recalibrate inventory and contractors manage cost pressures.

Bull vs Bear Scenario

The bullish case is that infrastructure spending, housing demand and electrification projects continue to support long-term cable demand, allowing organised players to regain volume traction once inventory levels normalise.

The bearish view suggests that prolonged commodity volatility and slower project execution could lead to weak channel demand and intensified price competition from smaller regional brands.

Risk Section

Key risks include further fluctuations in copper prices, sustained slowdown in construction activity, and continued downtrading by distributors toward lower-priced brands. Additionally, if EPC contractors continue facing margin pressure, procurement delays could persist, affecting order flows for cable manufacturers.

Overall, the channel checks point to a temporary demand recalibration rather than a structural slowdown, but the near-term environment for cable and wire companies could remain cautious as distributors prioritise inventory discipline.