Bajaj Electricals Stock Jumps 11%

Shares of Bajaj Electricals jumped sharply on Tuesday after the company announced its entry into the wires segment, a move that signals a renewed push to diversify its business at a time when demand in the category remains strong.

The stock surged as much as 11% to an intraday high of ₹468, snapping a seven-session losing streak and offering investors some relief. But with the stock still down about 35% over the last six months, is this rally just a short-term reaction or the start of a bigger turnaround?

Why Did Bajaj Electricals Shares Jump So Sharply?

The sharp rally followed the company’s disclosure that it will enter the wires business as a new product line under its Lighting Solutions segment. In a regulatory filing, Bajaj Electricals said the move is aimed at expanding and diversifying its operations while tapping into rising demand in the wires industry.

The company plans to launch the products shortly and will then look at the market response before deciding on the scale of investment. The eventual capital expenditure will depend on factors such as the size of the opportunity, operational needs, and broader external conditions, suggesting a measured approach.

For investors, the announcement came as a positive surprise, especially after recent pressure on the stock. The Lighting Solutions segment has been one of Bajaj Electricals’ stronger performers, and the wires entry is seen as a natural extension within the same vertical.

How Strong Is The Wires And Cables Opportunity?

The cables and wires industry has been one of the more resilient segments within the broader construction and electrical ecosystem. Demand has been supported by government-led infrastructure spending, rising rural electrification, growth in housing, and higher exports.

In the September quarter, Bajaj Electricals’ Lighting Solutions segment reported revenue of ₹274 crore, up from ₹250 crore a year earlier. Margins in the segment improved by 200 basis points to 7.9%, helped by operating leverage and a favourable product mix. Industry-wide, margins in the cables and wires segment typically range between 10% and 12%, broadly in line with Bajaj Electricals’ current lighting margins.

Does Rising Competition Change The Outlook?

The wires and cables space is already home to several well-established brands; on the same day the company announced its plans, stocks such as RR Kabel, Havells, and Finolex Cables slipped by up to 5%, suggesting investors are beginning to factor in the possibility of tighter competition.

At the same time, the segment has been drawing interest from much larger groups over the past year. The Adani Group has already outlined its plans to build capacity in cables and wires, while UltraTech Cement has positioned its entry as part of a broader push to offer end-to-end building solutions. These developments point to a market that is getting crowded but also one where demand is large enough to attract new players.

For now, the impact looks limited. Bajaj Electricals is entering with a small launch and is still watching how the market responds. The bigger challenge will be getting shelf space and mindshare in a segment where electricians and dealers already have strong preferences. Whether the company can break into that circle, and do so without stretching margins, will decide how far this move really goes.

Sources

Economic Times
Mint