R R Kabel Q1 FY27 earnings call

R R Kabel commenced FY27 on a strong note, achieving its highest ever quarterly revenue of ₹3,168 crores, marking a 54% year-on-year growth. Operating EBITDA nearly doubled to ₹285 crores, with the EBITDA margin expanding to 9% from 7% in Q1 FY26. Profit After Tax also saw a significant increase, reaching ₹205 crores compared to ₹90 crores in the corresponding quarter last year.

The Wires & Cables segment remained the primary growth driver, with revenue reaching ₹2,880 crores, a 57% year-on-year increase. Volume growth for the segment was 17% YoY, with cables growing over 25% and wires approximately 12%. The segment's profit margin improved to 9.9% from 7.6% in Q1 FY26, attributed to improved product mix, disciplined commodity management, and operating efficiency.

The FMEG business recorded a healthy revenue growth of 28% year-on-year, reaching ₹288 crores. Notably, the segment achieved operational breakeven during the quarter, a significant milestone compared to losses of ₹7 crores in Q1 FY26 and ₹9 crores in Q4 FY26. This turnaround was driven by continued demand for premium products, distribution expansion, and tighter cost control, with premium products contributing approximately 25% of FMEG revenues.

The company continues to focus on strengthening product availability, expanding its distribution reach, and deepening engagement with dealers and distributors, now having over 1.5 lakh retail touch points. On the B2B side, the focus remains on building capabilities in project, industrial, and power cables, which are expected to be increasingly important for future growth. Management also highlighted good progress in domestic expansion, particularly in the South, alongside existing strongholds in the West and North.

R R Kabel has a capex plan of ₹1,200 crores for FY26-FY28, with approximately 80% allocated to the cable side. Following an investment of ₹300 crores last year, the company plans to deploy ₹600-650 crores this year. New capacities are expected to be added in Silvassa (wire side) and Waghodia (cable side) during the current quarter, aiming to meet projected growth and volumetric targets, especially in the cable segment where utilization is high.

Despite ongoing volatility in metal prices, foreign exchange, and global uncertainties, the company maintains a positive long-term demand outlook, supported by infrastructure development, housing, industrial investment, and electrification. Management expects to achieve an overall volume growth of around 18% year-on-year for FY27, consistent with its long-term guidance. The company also noted a ₹14 crores exceptional item^📎 related to the reversal of a provision for new labor codes.