R R Kabel Q1 FY26 Results (NSE: RRKABEL)
Signal: Growth reaccelerated
The read
Q1FY26 consolidated revenue surged 54% YoY to ₹3,168 million, the highest quarterly growth in the prior series, driven by the Wires & Cables segment (57% YoY) likely benefiting from market share gains and/or copper price pass-through; FMEG revenue grew 28% but remained near breakeven, underscoring ongoing margin challenges. Consolidated PAT jumped 129% YoY, but was aided by a ₹138 million exceptional credit (labour codes reversal) and a tripling of other income (₹329 million vs ₹124 million), masking underlying margin compression (EBITDA margin contracted ~40bps YoY to ~8.2% ex-exceptional). The gross margin compression of ~22pp YoY (raw materials % of revenue rose from ~79.7% to 81.9%) signals input cost headwinds. EPS of ₹18.14 was in line with PAT growth. The company faces a new regulatory EPR obligation (scrap recycling) from April 2026, with financial impact yet to be determined.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,168.2 Cr | 53.9% | 6.9% |
| EBIT | ₹260.1 Cr | 118.6% | |
| Net profit | ₹205.2 Cr | 128.7% | |
| EPS | ₹18.14 | 128.5% | |
| EBIT margin | 8.21% |
P&L walk
Revenue growth accelerated to +53.9% YoY driven by Wires & Cables (+57.0% YoY); FMEG grew +28.0% YoY but remained near breakeven. Gross margin compressed ~22pp YoY (raw material cost as % of revenue jumped from ~79.7% to ~81.9%), likely due to higher copper prices, but operating leverage from employee cost growing slower (+38.4% vs revenue +53.9%) and a favourable exceptional credit (₹138 million recovery on labour codes) boosted PAT. EBITDA margin contracted ~40bps YoY to ~8.2% despite the exceptional, indicating underlying margin pressure. EPS of ₹18.14, +128.5% YoY, closely tracking PAT.
Segments
Wires & Cables drove the consolidated result with revenue of ₹28,800 million (+57.0% YoY) and segment result of ₹2,854 million (+105.1% YoY), generating the vast majority of operating profit. The FMEG segment managed revenue of ₹2,882 million (+28.0% YoY) but reported a near-zero segment result (₹-0 million), continuing to be a drag on overall margins.
Key positives
- Revenue growth of 53.9% YoY, the highest in the prior series, led by Wires & Cables segment (+57.0% YoY).
- Consolidated PAT jumped 128.7% YoY to ₹2,052 million, aided by an exceptional credit and higher other income.
- Wires & Cables segment profit surged 105.1% YoY to ₹2,854 million, underscoring strong demand and pricing power.
Key concerns
- Gross margin compressed ~22pp YoY as raw material costs (copper) as % of revenue rose from ~79.7% to 81.9%.
- EBITDA margin contracted ~40bps YoY to ~9.15% despite a favourable exceptional credit, indicating underlying margin pressure.
- FMEG segment remained near breakeven (segment result ~₹0 million), despite 28% revenue growth.
- Finance costs grew 74.2% YoY, outpacing revenue growth, suggesting increased leverage.
- New EPR obligation for cable scrap recycling from April 2026 creates regulatory uncertainty with unquantified financial impact.
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