Is rising competition killing profitability? We analyze industries like paints, quick commerce, and the cables/wires sector, looking at Polycab & KEI. Learn how new players and capacity expansion impact profitability and stock valuations. High margins and valuations attract new entrants, leading to increased supply. This can result in margin pressure, lower industry Return on Capital Employed (ROCE), and a de-rating of stock valuations (lower PE ratios), even if earnings grow. Tracking the supply side is crucial for investors.