Mumbai: Cables and wire makers - the stock market darlings in the recent bull run - tumbled in Thursday's trading, emerging among the day's biggest losers, after UltraTech Cement announced its foray into the sector with an ₹1,800 crore investment. Investors worried that the Aditya Birla Group's entry into this business would hurt the profitability of existing players, like the shakeup in the paint industry after the conglomerate's venture into the industry.KEI Industries plunged 21%, followed by RR Kabel and Polycab which fell 19-20%. Havells India and Finolex Cables fell 6% each."UltraTech's entry into the cables and wires (C&W) segment will likely increase competitive intensity in the industry," said Arun Agarwal, vice president of fundamental research at Kotak Securities. "Adoption of aggressive pricing by the new entrant to penetrate the market potentially poses risk to margins in the C&W industry."India's largest cement company has plans to invest ₹1,800 crore over the next two years, and the plant is expected to be commissioned by December 2026. UltraTech shares ended 5% lower on Thursday."Unlike the paint industry, which is highly concentrated with well-established brands and significant entry barriers, the cables and wires industry is far more fragmented, lacking a dominant market leader and comprising numerous local players," said Divyam Mour, research analyst at Samco Securities. "This fragmented structure makes it easier for new entrants to establish themselves."118614390Mour also said that UltraTech is well-positioned to leverage synergies from its existing cement business, and by cross-selling its wires and cables products to its existing customers, UltraTech can streamline distribution and minimise additional supply chain investments. This will help them focus primarily on production, and enhance profitability and provide them a competitive edge.HSBC said ₹1,800 crore is a significant investment in the building wire and low voltage construction cables segment, which has relatively low barriers to entry."This development may weigh on share price performance in the near term," said the brokerage in a client note. "UltraTech's entry and scale-up are coming at a time when the industry is likely at the end phase of its cycle, with significant capacity addition plans by the incumbents."Some analysts said the market may be overestimating the magnitude of this decision. "The top five companies have already lost a significant market-cap due to the selloff today, which we think could be an overreaction by the markets," said Manish Valecha, research analyst at Anand Rathi Institutional Equities. "Currently the sector makes ₹1.8 lakh crore in revenue, and with UltraTech's investment of ₹1,800 crore, its first full year revenues could be around ₹6,500-7,000 crore, amounting to 3-4% of the total market share, which will be taken from both organised and unorganised players."Mour said the selloff in shares of established cable companies appears excessive considering UltraTech's production is scheduled to commence only by next December and existing players still have time to adapt and implement strategies to counter this new competition.Valecha said that there is a strong possibility of a pullback in the coming days. Polycab is his top pick.