At a Glance

RR Kabel lit up the earnings board in Q1 FY26 with revenue ₹2,058.6 Cr (+13.9% YoY) and PAT ₹89.8 Cr (+39.4% YoY). EBITDA surged 50% YoY to ₹143 Cr as wires & cables (W&C) segment rode on strong demand and better contribution margins. However, the FMEG (Fans, Switches, Lighting) business remains a problem child, still making losses though bleeding less than last year. Margins improved YoY but slipped sequentially. Stock trades at ~P/E 30, not cheap, but the growth narrative keeps it attractive.

Introduction

Once a humble wire maker, RR Kabel is now a diversified electricals player aiming to be the Havells-killer. Q1 numbers show the core W&C business flexing muscles with 16% revenue growth and expanding margins. The FMEG segment? Think of it as the cousin who always needs money – losses narrowed but it still drags. Working capital days improved (52 from 56), export share jumped to 29% from 24%, and capex is ramping up. Investors love the growth story, but FMEG must turn profitable to justify the steep multiples.

Business Model (WTF Do They Even Do?)

RR Kabel operates in two segments:

1. Wires & Cables (89% of revenue) – House wires, power cables, specialty cables. High demand from housing, infra, and renewables.
2. FMEG (11% revenue) – Fans, lighting, switches – a high-potential but currently loss-making vertical.

They focus on branding, distribution expansion, and exports (now ~30% of revenue). Think of them as the fast-growing challenger in the electrical space.

Financials Overview

Q1 FY26 Results

• Revenue: ₹2,058.6 Cr (+13.9% YoY, -7.2% QoQ)
• EBITDA: ₹143.1 Cr (+49.9% YoY, -26.9% QoQ)
• EBITDA Margin: 7.0% (vs 5.3% YoY)
• PAT: ₹89.8 Cr (+39.4% YoY, -30.5% QoQ)
• EPS: ₹7.8

Commentary: YoY growth impressive, but sequential margins dipped due to higher input costs and seasonal factors.

Valuation

1. P/E Method
   FY25 EPS ₹27 × fair P/E 25 = ₹675/share
2. EV/EBITDA Method
   FY25 EBITDA ₹488 Cr × 15 = ₹7,320 Cr → per share ≈ ₹730
3. Book Value
   BV ₹380 × P/B 3 = ₹1,140

🎯 Fair Value Range: ₹675 – ₹1,140 (current levels moderately valued).

What’s Cooking – News, Triggers, Drama

• W&C demand strong, exports gaining share.
• FMEG losses narrowing but needs to flip to green.
• Working capital improving, cash reserves up.
• Capex to scale capacity, product launches in pipeline.

Balance Sheet

Auditor Roast: “Debt is low, equity rising. But inventory pile-up needs watching.”

Cash Flow – Sab Number Game Hai

Commentary: Strong operational cash flows, reinvested back into expansion.

Ratios – Sexy or Stressy?

Roast: “Returns decent, leverage low – but margins still too slim for the hype.”

P&L Breakdown – Show Me the Money

Commentary: Growth consistent; margins still thin.

Peer Comparison

Commentary: RR Kabel trades cheaper than Havells but richer than legacy cable peers.

Miscellaneous – Shareholding, Promoters

• Promoters: ~62%
• FIIs: Rising (positive sign)
• DIIs: Stable
• Public: ~20%

Strong promoter skin in the game.

EduInvesting Verdict™

RR Kabel’s Q1 FY26 shows strong W&C growth, improving margins, and narrowing FMEG losses. Working capital discipline and cash flows are solid. However, thin PAT margins and sequential decline in profitability keep expectations in check.

SWOT Quickie

• Strengths: Fast growth, strong brand, export push.
• Weaknesses: Thin margins, FMEG losses.
• Opportunities: Domestic housing boom, exports, premium products.
• Threats: Raw material volatility, intense competition.

Final Word: RR Kabel remains a growth play in the electricals sector. Keep an eye on FMEG turnaround – it’s the joker that could turn this into an ace.

Written by EduInvesting Team | 31 July 2025
SEO Tags: RR Kabel, Wires & Cables, FMEG, Financial Analysis