Rising Raw Material Costs to Drive Cable and Wire Prices Up
Cable, wire prices to rise amid soaring raw material costs: Report
Image: Asianet Newsable
A report by Crisil Ratings indicates that escalating raw material costs, particularly for copper, aluminium, and PVC, will lead to significant price increases in the cable and wire sector. Revenue is projected to grow by 28-30% this fiscal year, driven by ongoing demand in infrastructure and renewable energy projects.
- 01Copper and aluminium prices have surged by 22-27%, while PVC costs have risen by around 12%.
- 02Cable and wire manufacturers are expected to increase prices to offset rising raw material costs.
- 03The sector's revenue is projected to grow by 28-30% this fiscal year due to higher prices and sustained demand.
- 04Investments of ₹10-12 lakh crore are anticipated in renewables, power, real estate, and data centers, driving demand.
- 05Operating profits are expected to expand by 12-13%, supported by stable cash flows and low external debt.
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According to a report by Crisil Ratings, the cable and wire sector is facing significant increases in raw material costs due to tightening global supplies, particularly amid the ongoing conflict in West Asia. Prices for copper and aluminium have surged by 22-27%, while polyvinyl chloride (PVC) has seen a 12% increase. As a result, manufacturers are expected to implement price hikes to pass on these costs to customers. The sector's revenue is projected to grow 28-30% this fiscal year, driven by robust demand from infrastructure projects in renewable energy, real estate, and data centers. Despite a forecasted moderation in volume growth to about 10% due to higher prices affecting discretionary spending, the industry's historical ability to pass on costs suggests resilience. Operating profits are anticipated to expand by 12-13%, supported by healthy cash flows and minimal reliance on external debt, although competition and potential investment slowdowns remain risks to monitor.
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The rise in cable and wire prices will likely affect construction and infrastructure project costs, potentially impacting consumer prices.
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