R R Kabel shares zoom 6% after posting 20% YoY jump in net profit. Should you invest?

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Shares of R R Kabel surged nearly 6% on BSE to the day’s high of Rs 1,820.80 after the company reported a profit after tax of Rs 78.7 crore, up by 20.6% year-on-year (YoY).

The company's revenue also rose 15.7% YoY to Rs 1,754 crore for the fourth quarter of FY 24, while EBITDA margin decreased by about 10 bps YoY to 6.6%.


The company stated that its segment profit also increased by 43% in FY24 compared to FY23 due to cost reductions and operational efficiencies.

Here is what brokerages say:


Motilal Oswal

R R Kabel has demonstrated its ability to grow at a higher rate than peers, with its cables & wires segment recording a CAGR of 21%/24% in revenue/EBIT over FY19-24. Management also remains optimistic for cables & wires demand growth in the country and indicated that its volume growth would be 20% in FY25. Motilal reiterated its 'buy' rating on the stock with a target price of Rs 2,200.

Citi Group

The global brokerage firm stated that the company's Q4 results were broadly in line with their estimates and R R Kabel continues to experience strong industry demand growth tailwind. Citi sees revenue growth of 18-20% over the medium term and EPS CAGR of 27% over FY 24-26. Citi has a 'buy' rating on the stock with a revised target price of Rs 2,043.
Also read: Hero FinCorp approves Rs 4,000 crore fundraise via IPO

Prabhudas Lilladher

"We continue our positive view on RR Kabel on account of a strong brand with diverse product portfolio, well-structured capacity expansion plans, focus of increasing sales per dealers /distribution and a healthy growth in FMCG segment," said Prabhudas Lilladher in its report.

The domestic brokerage firm has a 'buy' view on the stock with a target price of Rs 1,926.

JM Financial

The wires and cables volume grew 19.6% YoY mainly led by volumes, though lower copper and aluminum prices coupled with higher aluminum cable mix resulted in a 14% increase in wires and cables revenue. While the company has retained its earlier Rs 500 crore capex programme (FY 24-25), the management indicated finalisation of the capex plan for FY 26-28 soon, which can cater to growth over the next 5-10 years.

With this, JM Financials has a 'buy' rating on the stock with a target price of Rs 1,870.

RR Kabel Block deal

In another update, PE firm TPG Asia sold its entire stake in wire and cable manufacturer RR Kabel through a block deal today to raise Rs 957 crore, according to a term sheet reviewed by ET. TPG Asia held a 5% stake in the company as of the end of March 2024, according to BSE filings.

The PE firm had acquired a 21% stake in RR Kabel five years before the IPO that was launched in the second half of 2023, and since then, it has been consistently pruning its stake.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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