JM Financial has downgraded its ratings on three of India's largest cables and wires makers, citing rising competition in the sector, and shares of the companies fell as much as 8% following the move.

The brokerage downgraded Polycab India and KEI Industries to "add" from their previous "buy" recommendations. RR Kabel was cut to "reduce" from its earlier "add" rating.

Polycab India is one of the country's leading manufacturers of wires and cables, while KEI Industries and RR Kabel are also prominent players in the same industry. The cables and wires sector in India has attracted increased attention in recent years, with new entrants and capacity expansions intensifying competitive pressure. Demand for cables and wires has been supported by India's power infrastructure build-out, electrification push, and real estate and industrial activity, which has drawn both existing players and new entrants to expand capacity — a dynamic that brokerages now watch for its effect on pricing and market share among incumbent leaders.

The downgrade comes as JM Financial flagged growing competition as a key concern for the sector's growth outlook. For investors tracking these stocks, further brokerage rating actions, commentary on capacity additions by new and existing players, and quarterly margin trends will be indicators of how competitive pressure is playing out in the sector.

The original report is available at CNBC-TV18.