Motilal Oswal Maintains Buy Rating for Neutral R R Kabel with Price Target of Rs 1620

Motilal Oswal Raises Estimates for RR Kabel Following Strong Q4 Performance

RR Kabel (RRKABEL) has reported a strong fourth quarter (4QFY26) performance, exceeding the expectations of Motilal Oswal's research team. The company's consolidated revenue rose by approximately 34% year-over-year (YoY) to INR29.6 billion, a 10% beat on estimates.

The cable and wire (C&W) segment was a key driver of RR Kabel's performance, with revenue and margin exceeding estimates. Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) grew by approximately 35% YoY to INR2.6 billion, a 24% increase compared to Motilal Oswal's estimate. The operating profit margin (OPM) was flat YoY at 8.8%, a 1.0 percentage point increase from the research team's estimate. Profit After Tax (PAT) increased by 30% YoY to INR1.7 billion, a 24% beat on estimates.

Long-term Outlook

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Motilal Oswal estimates RR Kabel's revenue, EBITDA, and PAT compound annual growth rate (CAGR) at approximately 15%, 18%, and 17%, respectively, over the fiscal years 2026-2028. The research team also forecasts OPM to decline to 8.2% and 8.5% in FY27 and FY28, respectively, from 8.1% in FY26. The stock is currently trading at 32x and 26x FY27E and FY28E earnings per share (EPS), respectively.

Valuation and Recommendation

Motilal Oswal values RR Kabel at 27x FY28E EPS, translating to a revised target price (TP) of INR1,620 (earlier INR1,500). The research team has reiterated a Neutral recommendation for the stock.

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