Buy R R Kabel; target of Rs 1800: Prabhudas Lilladher

Prabhudas Lilladher is bullish on R R Kabel has recommended buy rating on the stock with a target price of Rs 1800 in its research report dated November 09, 2023.

Broker Research

November 14, 2023 / 18:49 IST

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Prabhudas Lilladher's research report on R R Kabel

We upward revised our FY24E earnings estimates by 5.8% on account of healthy H1FY24 performance and strong guidance for H2FY24. RR Kabel (RRKABL) reported healthy revenue growth of 17.7% YoY in Q2FY24 mainly with 19% revenue growth in W&C which was driven by export business (+31.3% YoY). The company reported 28% vol. growth in H1FY24 and expected momentum will continue in W&C segment. EBITDA margin reported at 7.5% in Q2FY24 mainly with improvement in gross margin (+240bps YoY) on account of a) product mix, b) pricing, c) cost efficiency. We believe RR Kabel continue to benefit on account of 1) strong brand with diverse product portfolio 2) well-structured capacity expansion plans, 3) increasing dealers /distribution network and 4) distribution led export business.

Outlook

We estimate Revenue/EBITDA/PAT CAGR of 21.1%/39.3%/44.5% over FY23-26E. Maintain ‘BUY’ at revised TP of Rs 1,800 (Rs 1624 earlier) given solid H1 performance and strong guidance for coming years.

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