Neutral R R Kabel; target of Rs 1470: Motilal Oswal

Neutral

Motilal Oswal's research report on R R Kabel

RRKABEL’s 2QFY26 earnings were above our estimates, led by a higher than-estimated margin in C&W. Revenue grew ~20% YoY to INR21.6b (in line), driven by robust growth of ~22% in the C&W segment. EBITDA grew ~105% YoY at INR1.8b (~14% beat). OPM expanded 3.4pp YoY to ~8% (80bp above estimate). Adj. PAT grew 135% YoY to INR1.2b (~20% beat). Management highlighted that the underlying demand environment continues to be favorable, led by infrastructure investments, formalization of the electrical sector, and rising consumer preference for branded and energy-efficient products. Margin expansion during the quarter was driven by positive operating leverage, better cost absorption, and sustained efficiency initiatives across the procurement and production chains. In C&W, the company targets ~18% volume CAGR, 10.5-11% EBIT margin (through better capacity utilization and product mix), and over 20% ROE over the next 2-3 years.

Outlook

We value RRKABEL at 30x Dec’27E EPS to arrive at our revised TP of INR1,470 (earlier INR1,340). Reiterate Neutral.

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R R Kabel_04112025_Motilal Oswal