India's RR Kabel posts drop in Q2 profit on higher raw material costs

R R Kabel

24/10/2024 14:14

Oct 24 (Reuters) - 
    India's RR Kabel  RRKA.NS  reported a 33% drop in second-quarter profit on Thursday, hurt by a sharp uptick in copper prices and
weakness in demand for electrical goods.
  
    The company's consolidated profit fell to 495.3 million rupees($5.9 million) for the three months ended Sept. 30 from 741 million
rupees a year earlier.
    Revenue jumped 12.5% to 18.10 billion rupees, while expenses grew to 17.57 billion rupees from 15.20 billion rupees, as raw material
cost rose around 7%.
    For further result highlights, click  urn:newsml:reuters.com:*:nFWN3M00WX

    KEY CONTEXT
    Cable and wire companies are experiencing strong demand, particularly from real estate and infrastructure projects. This growth is
being further aided by government's push to boost economy and affordable housing.
    However, higher prices of key raw materials such as copper have hurt the earnings of consumer goods makers. Copper prices, which hit
a record high earlier this year, have risen more than 10% in 2024.
    RR Kabel had also reported a drop in first-quarter profit as expenses jumped.
    Analysts also said that demand for fast-moving electrical goods like fans and coolers were subdued due to inflationary pressures, and
as demand runs dry post-summer.
    Earlier this month, peers Polycab  POLC.NS  and Havells India  HVEL.NS  reported second-quarter profit below expectations, hurt by
high expenses.
    
  
 PEER COMPARISON
    
    
                                   Valuation (next 12 months)     Estimates (next 12 months)         Analysts' sentiment         
                      RIC        PE     EV/EBITDA   Price/Sales   Revenue     profit growth    Mean     # of      Stock to       Div
                                                                  growth                       rating   analysts  price target   yield
                                                                                                                                 (%)
 R R Kabel Ltd         RRKA.NS   40.05  26.85       NULL          18.58       33.04            BUY      9         0.79           0.37
 Polycab India Ltd     POLC.NS   45.61  31.62       4.31          19.70       17.97            BUY      26        0.89           0.45
 Havells India Ltd     HVEL.NS   61.52  41.83       4.85          15.90       23.77            HOLD     23        0.90           0.51
 Crompton Greaves      CROP.NS   38.54  25.42       2.67          12.78       29.24            BUY      32        0.81           0.76
 Consumer                                                                                                                        
 Electricals Ltd                                                                                                                 
    
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

* Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
 
 
 
 JULY-SEPT STOCK PERFORMANCE

-- All data from LSEG
--$1 = 84.0460 Indian rupees

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 (Reporting by Nishit Navin; Editing by Varun H K)
 ((Nishit.Navin@thomsonreuters.com;))