R R Kabel (RRKABEL IN) – Q1FY27 Result Update – Cable momentum strengthens growth trajectory – HOLD

RRKABEL reported a strong Q1FY27 performance with revenue growing by 54% YoY to, driven by robust execution in the W&C business, healthy domestic demand and recovery in export shipments, particularly in the Middle East during May’26 and Jun’26. W&C revenue grew 57% YoY with segment EBIT grew by 105% YoY, supported by margin expansion to 9.9% (+230bps) led by an improved product mix, and operating efficiencies. Overall volume grew 17% YoY, with similar growth across domestic and exports, while cable volumes grew 25% and wires 12%, reflecting stronger traction in cables. Management reiterated its guidance of W&C EBIT margin of 10.5% by FY28, with future growth expected to be driven primarily by the cable business. Capex plans remain on track, with INR 3.0bn incurred in FY26 and INR 6-6.5bn planned for FY27, of which ~80% will be allocated towards cable capacity expansion. FMEG revenue grew 28% YoY and achieved operational breakeven during the quarter, aided by premiumisation (premium products contributing 25% of FMEG segment), better realizations in fans despite flat volumes, healthy growth in lighting, appliances and switches, while management continues to target ~20% FMEG growth in FY27. We estimate revenue/EBITDA/PAT CAGR of 21.9%/28.5%/28.1% over FY26-28E. We upward revise our FY27/FY28 earnings estimates by 9.0%/11.4% factoring in strong cable led growth and W&C margin expansion. We maintain ‘HOLD’ rating with revised TP of INR2,596 (earlier INR 1,964) based on 35x (earlier 30x) Mar’28 earnings.