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Informist, Thursday, Jul. 31, 2025

By Ketaki Patil

MUMBAI - R R Kabel Ltd. is expected to report a substantial on-year rise in consolidated net profit and revenue for the June quarter, primarily aided by strong performance in the cables and wires segment. Healthy domestic demand aided by volume growth and higher exports is seen boosting the company's earnings. The fast-moving electrical goods segment, however, is expected to post a decline owing to tepid demand for fans and margin pressure in the lighting and appliances categories.

R R Kabel's consolidated net profit for Apr-Jun is expected at INR 911 million, up 41.5% from a year ago but down 29.5% sequentially. The company's consolidated revenue is seen at INR 20.51 billion, up 13% on year but down nearly 8% on quarter.

YES Securities has the highest net profit estimate for the company at INR 1.03 billion and the highest revenue estimate at INR 20.83 billion. "Channel re-stocking with improved demand for housing wires along with commissioning of cables facility should result in double-digit revenue growth," the brokerage said. The lowest net profit estimate is INR 837 million from JM Financial while the lowest revenue estimate is INR 20.26 billion by Prabhudas Lilladher.

While the revenue is expected to rise 13% on year, the net profit is expected to rise over 41% on year. The sequential drop in revenue and profit is attributed to a weak summer, the early onset of the southwest monsoon, and subdued demand in the electrical goods categories, especially fans and air-cooling appliances. This segment had contributed 12% of the company's revenue for the financial year 2024-25 (Apr-Mar).

Revenue from the cables and wires segment is expected to increase from the year-ago quarter but revenue from the fast-moving electrical goods segment is expected to decline. "Cables are expected to outpace wires in June quarter FY26 due to stronger demand from industrial and infrastructure segments," Prabhudas Lilladher said. An increase in the government's capital expenditure is expected to have helped boost demand for the  company's products. 

The loss of the fast-moving electrical goods segment is expected to fall to INR 109 million from INR 207 million a year ago, Motilal Oswal Financial Services said. It factors in an on-year fall of 120 basis points in the margin of the lighting segment, 65 bps in the margin of the switchgear segment, and a fall of 40 bps in the margin of the electrical consumer durables segment.

The company is expected to post earnings before interest, tax, depreciation, and amortisation of INR 1.43 billion, up 49% from a year ago but down 27.2% sequentially. The highest estimate for EBITDA is INR 1.60 billion from YES Securities and the lowest is INR 1.32 billion from JM Financial. "EBITDA margin (is) expected to expand by 160 bps with improved realisations," Prabhudas Lilladher said. Price hikes in May following a rise in copper and aluminium prices may have also supported realisations, YES Securities said.

Although finance costs and depreciation are expected to rise 28% and 23%, respectively, on year, Motilal Oswal expects the operating profit margin will be 6.9% for the reporting quarter, up 160 bps from a year ago.

R R Kabel is expected to report its earnings for the June quarter Thursday. Investors will watch out for the impact of volatility in raw material prices and increasing competitive intensity.

At 1441 IST, the company's shares were at INR 1,439 on the National Stock Exchange, up 1.7%. The shares are up 22% since the company announced its March quarter earnings. Of the five brokerage reports on the company available with Informist, four have a "buy" recommendation at an average target price of INR 1,498. One brokerage has a "hold" recommendation.

Following are the Apr-Jun earnings estimates, in INR million, for R R Kabel, based on reports from four brokerages in the descending order of net profit:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Rajeev Pai

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