Broker’s call: RR Kabel – The Hindu BusinessLine

BUSINESS

Broker’s call: RR Kabel – The Hindu BusinessLine

AIMPWA

May 7, 2025

Table of Content

Target: ₹1,400

CMP: ₹1,228.65

RR Kabel has delivered a strong Q4. Revenue grew 26 y-o-y (5 per cent above JMFe) on the back of solid volume traction in domestic and export markets. Growth was broad-based, aided by continued strength in the wires and cables (W&C) segment (+28 per cent y-o-y) and steady momentum in the FMEG portfolio (+13 per cent y-o-y).

EBITDA increased 69 per cent y-o-y (32 per cent above JMFe), with margin expanding by 220 bps y-o-y, attributable to operating leverage, savings in operational cost, and an improved product mix. Strategic focus remains on scaling up the cables business, brand visibility, and investing in manufacturing capabilities. Going forward, upcoming capacities are expected to reduce the company’s dependence on wires and increase the contribution from cables.

Our TP sees a reduction to ₹1,400 vs ₹1,450 earlier despite 6-7 per cent revision in FY26/27 estimates (driven by benefits from its capacity addition plans and a revamp in its product mix towards cables) as we reduce our target P/E multiple to 32x (35x earlier) given the broader de rating in the Indian W&C space in anticipation of higher competitive intensity. Any fluctuations in metal prices would be incremental to the top line.

Published on May 7, 2025

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