India's R R Kabel posts lower Q3 profit as stiff competition squeezes wires margin

R R Kabel

28/01/2025 14:23

Jan 28 (Reuters) - Indian consumer electrical company R R Kabel  RRKA.NS  reported a 3% fall in third-quarter
profit on Tuesday, as stiff competition squeezed its margins from the wires segment.
    The company's consolidated profit fell to 685.7 million rupees ($7.93 million) for the three months ended Dec. 31 from
709.6 million rupees a year earlier.
    Its revenue from operations rose 9% to 17.82 billion rupees, while total expenses jumped 10%.
    Its core wires and cables segment, which contributes nearly 87% to the total revenue, registered a 6% year-on-year dip
in profit during the quarter.
    For further earnings highlights, click (Full Story)
 
KEY CONTEXT
    Rising demand from the real estate and power distribution sectors has continued to drive growth for electronic goods
manufacturers.
    Analysts note that electrical goods makers face intense competition in the high-margin wires segment, where supply
outpaced demand.
    Rival Polycab  POLC.NS  and V Guard Industries  VGUA.NS  both missed their third-quarter profit estimates, impacted by
margin pressure in the wires business due to commodity price fluctuations.
    
    
PEER COMPARISON
    
    
                                    Valuation (next 12      Estimates (next 12          Analysts' sentiment           
                                          months)                months)                                          
                           RIC      PE    EV/EBI  Price/   Revenue      Profit     Mean     # of      Stock to      Div
                                           TDA    Sales   growth (%)  growth (%)  rating*  analyst     price       yield
                                                                                              s       target**      (%)
 R R Kabel Ltd           RRKA.NS   32.14  21.31     -       18.03       44.45       Buy       9         0.65        0.41
 Polycab India           POLC.NS   37.73  25.95    4.00     18.02       18.98       Buy      26         0.76        0.53
 Havells India           HVEL.NS   53.07  36.12    4.07     14.91       23.07       Buy      24         0.82        0.66
 Crompton Greaves        CROP.NS   31.21  21.30    2.39     12.35       25.93       Buy      32         0.70        0.89
 Consumer Electricals                                                                                             
 
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above
the PT
       
    
OCTOBER TO DECEMBER STOCK PERFORMANCE
    
 
   
    
 -- All data from LSEG
 -- $1 = 86.5210 rupees
    

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RR KABEL OCT-DEC stock performance    https://tmsnrt.rs/4hcHNL4
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 (Reporting by Ashna Teresa Britto)
 ((AshnaTeresa.Britto@thomsonreuters.com;))