R R Kabel (RRKABEL IN) – Q2FY26 Result Update – Volume growth with margin expansion continues – BUY
Published on 03 Nov 2025
RRKABEL reported healthy volume growth of 16.1% YoY, with both cables and wires segments recording similar growth levels and improved realization, driven by a robust 22.3% revenue growth in the W&C segment. EBITDA margin expanded by 340bps to 8.1% (vs. 4.7% in Q2FY25), driven by operating leverage and improved cost absorption, supported by ongoing efficiency measures across procurement and production functions. The company aims for 100bps W&C EBIT margin improvement in FY26, in line with its Project RRise. Exports grew by 34.5%, driven by robust demand from Europe and the Middle East, which together account for 75–80% of total exports. Contribution from the US market has been fluctuating; however, it is expected to normalize soon, thereby aiding overall export growth. RRKABEL remains on track to achieve 18% volume growth in FY26 driven by cables and expects the FMEG segment to break even by Q4FY26. We upward revise RRKABEL FY27/FY28 earnings by 1.6%/1.0% factoring in the margin improvements. We estimate revenue/EBITDA/PAT CAGR of 18.7%/27.8%/27.9% over FY25-28E. Maintain ‘BUY’ rating with revised TP of Rs1,634 (earlier Rs1,615) based on 30x Sep’27 earnings.
