Buy R R Kabel; target of Rs 1812: Prabhudas Lilladher

Buy

Prabhudas Lilladher's research report on R R Kabel

R R Kabel (RRKABL) reported moderate revenue growth of 9.1% YoY, driven by softer 7.6% growth in W&C segment due to weak demand and channel destocking. Fluctuations in raw material prices in the wire segment contributed to 2.4% decline in W&C volumes. However, the company achieved 4.7% volume growth in the W&C segment for 9MFY25 and expected strong 15% growth in Q4FY25, supported by both domestic W&C business and pick-up in exports. The company expects EBIT margin of ~8% in the W&C segment for Q4FY25 and projects EBITDA breakeven in the FMEG segment by Q1FY26. The company expects healthy volume growth in FY26 on account of improvement in domestic wire demand with stability in RM prices, benefit from enhanced capacity in the cable business and a recovery in exports with reduced freight rates and normalized shipments. We expect revenue/EBITDA/PAT CAGR of 19.6%/27.3%/30.3% over FY24-27E. Maintain ‘BUY’.

Outlook

We downward revise our FY25/FY26/FY27E earnings estimates by 15.8%/9.9%/4.9% on account of subdued volume growth in wire segment and losses in FMEG segment in 9MFY25. We have revised TP to Rs1,812 (Rs2,151 earlier), based on 31x FY27E earnings.

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R R Kabel - 30012025 - prabhu