Summary
R R Kabel Limited - Q3 FY26 Earnings Call Summary Monday, February 02, 2026 12:00 PM
Event Participants
Executives 2 Mahendrakumar Kabra (MD), Rajesh Jain (COO)
Analysts 8 Achal Lohade, Ashish Kanodia, Balasubramanian, Dhruv Jain, Karan Kamdar, Natasha Jain, Prakshal Jain, Rahul Agarwal, Rohit Charan, Sandesh Shetty, Vidit Trivedi
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹2,536 crores | +42.3% YoY; Driven by strong volume growth in wires & cables and higher commodity-led realizations. |
| EBITDA | ₹206 crores | +86.0% YoY; Margin expansion driven by operating leverage and better cost absorption. |
| Profit After Tax (PAT) | ₹118 crores | +72.4% YoY; Reflects strongest ever 9-month bottom-line performance. |
| Wires & Cables Revenue | ₹2,293 crores | +48.6% YoY; Supported by 30%+ overall volume growth. |
| FMEG Revenue | ₹243 crores | +1.25% YoY; Steady performance amid cautious discretionary demand and channel adjustments. |
| W&C Volume Growth | 30% | Domestic volume grew 30%+, while export volumes increased by 25%. |
| W&C EBIT Margin | ~8.7% | Target remained on track for 100 bps annual improvement despite 25% copper price volatility. |
| Working Capital Days | 56 days | Stable YoY; Management targets a sustainable range of 50-60 days. |
| Capex (9M FY26) | ₹280 crores | Part of a ₹1,200 crore 3-year plan, with 80% dedicated to cable capacity. |
Geographic & Segment Commentary
- Wires & Cables: Segment grew 48.6% YoY in revenue, driven by robust infrastructure, real estate, and industrial demand. Volume growth was 30% for wires and 25%+ for cables, with management noting that pricing discipline helped mitigate a 25% surge in copper prices during the quarter.
- FMEG: Performance was steady with revenue at ₹243 crores; segment losses were curtailed to ₹5 crores as the company moves toward a Q4 FY26 breakeven target. Fans contribute 50% of segment revenue, followed by lighting (32%), with 20% of the mix now coming from premium/mid-premium categories.
- Exports: Revenue grew 25% in volume terms, with the EU accounting for 40% of total exports. Management highlighted the potential benefit of the India-EU trade deal, which could eliminate the 3.7% tariff on wires and cables over the next 12 months.
Company-Specific & Strategic Commentary
- Project RISE: Management confirmed they remain firmly on track with the strategic roadmap to improve operating efficiencies and achieve stated milestones.
- B2B Expansion: While 70% of revenue currently comes from B2C (wires), the company is investing 80% of its ₹1,200 crore capex into the B2B cable segment to align with the industry mix where cables represent 65% of the market.
- Pricing Discipline: The company implemented multiple price hikes (including three in January alone) to pass through a 20-25% increase in copper and aluminum costs, maintaining segment margins.
- Distribution Reach: Current network includes 6,000+ dealers/distributors and 150,000 retail points, with a strategic focus on increasing depth in South and East India.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Industry Growth | 14% - 15% CAGR | Expected to grow at double the rate of India’s GDP (7-8%). |
| RR Kabel Volume | 17% - 18% (FY26) | Management is confident in exceeding industry averages through capacity expansion. |
| FMEG Profitability | Breakeven (Q4 FY26) | Driven by portfolio rationalization and reaching critical scale. |
| W&C EBIT Margin | 10.5% (FY28) | Target of 100 bps annual improvement through higher cable mix and operating leverage. |
| Long-term FMEG | 5% - 6% EBIT (FY28) | Expected 25% CAGR due to low base and expansion in South India. |
Risks & Constraints
| Risk | Context |
|---|---|
| Commodity Volatility | Copper prices rose 25% in Q3; while passed through, extreme volatility creates 15-day lags in margin recovery and impacts channel working capital. |
| Channel Stocking | Rapid price falls (e.g., copper moving back to $10,000) could lead to temporary destocking at the dealer level, impacting short-term revenue. |
| Management Transition | Recent senior hiring and reshuffling were noted by analysts; however, MD clarified the team is now complete and stabilized. |
Q&A Highlights
Demand & Inventory
- Question: What is the current demand environment and channel inventory status? (Natasha Jain)
- Answer: Demand is strong across real estate and industrial sectors. Channel inventory has increased by only 5-7 days because the 25% value jump limits how much stock dealers can finance (Rajesh Jain).
Margin Sustainability
- Question: How did margins hold up despite copper rising 25% in one quarter? (Dhruv Jain)
- Answer: Pricing is a continuous process; the company took multiple hikes in December and January. Margin impact was limited to ~0.5% due to disciplined pass-throughs (Rajesh Jain).
Export Strategy
- Question: How does the EU trade deal impact the business? (Vidit Trivedi)
- Answer: Current tariffs are ~3.7% in the EU. The deal will bring this to 0%, which is highly beneficial as 40% of exports go to the EU. Most export orders are backed by 100% back-to-back commodity booking to hedge risk (Rajesh Jain).
FMEG Turnaround
- Question: When will FMEG see profitability? (Sandesh Shetty)
- Answer: Losses were reduced to ₹5 crores this quarter despite flat growth. The company expects to reach EBIT breakeven in Q4 FY26 (Rajesh Jain).
Key Takeaway
R R Kabel delivered its strongest-ever nine-month performance in Q3 FY26, with consolidated revenue growing 42.3% YoY to ₹2,536 crores and PAT increasing 72.4% to ₹118 crores. The Wires & Cables segment remained the primary engine, clocking 30% volume growth, while the FMEG segment narrowed losses significantly toward a projected Q4 breakeven. Strategically, the company is pivoting toward a higher B2B cable mix, backed by a ₹1,200 crore three-year capex plan (80% for cables), aiming for a 10.5% EBIT margin in cables by FY28. Management successfully navigated a 25% surge in copper prices through frequent price adjustments and expects to maintain 17-18% volume growth for the full year. Looking forward, the company is positioned to benefit from domestic infrastructure tailwinds and the India-EU trade deal, provided it can continue to manage commodity volatility and successfully expand its distribution footprint into South and East India.
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