Buy R R Kabel; target of Rs 2735: Prabhudas Lilladher

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Robust execution in the W&C business, with high-single-digit volume growth and double-digit growth in wires, supports revenue growth.
  • Healthy demand across domestic and export markets, with exports growing 79.9% YoY, contributes to revenue expansion.
  • Management's guidance for 14-15% volume growth in FY27 and EBIT margin of 9.5% for FY27 and 10.5% by FY28 provides a positive outlook.
  • FMEG segment's growth, led by strong performance in appliances and new product launches, and the target to achieve breakeven in FY27, adds to the bullish view.

Thesis Validation Checklist

  • Monitor volume growth in the W&C segment and overall revenue expansion.
  • Track EBIT margin improvements in the W&C segment and progress towards the guided margins.
  • Observe the FMEG segment's progress towards achieving breakeven and its contribution to overall profitability.
  • Watch for capex plans and their impact on future expansion and profitability.
  • Keep an eye on export market performance and its contribution to revenue growth.