Indian wire maker R R Kabel's exports hit by Red Sea crisis -exec

R R Kabel

30/01/2024 11:54

By Hritam Mukherjee
       BENGALURU, Jan 30 (Reuters) - As much as half of Indian
wires and cables maker R R Kabel's  RRKA.NS  exports are being
delayed due to the Red Sea crisis but it is passing on higher
freight costs to customers via price hikes, the company's
finance chief told Reuters on Tuesday.
    Attacks by Yemen's Houthi militia on merchant ships in the
Red Sea and retaliatory U.S. strikes have ratcheted up tensions
in the Middle East as the Gaza war rages on, forcing companies
to reroute shipments as they face delays and jacked-up rates.
    "We have no option but to reroute supplies. The cycle will
be delayed and we don't know how much time it would take to
normalise," Chief Financial Officer Rajesh Jain said, estimating
about 40%-50% of the company's exports were affected.
    R R Kabel, which got 27% of its revenue for April-December
from exports, is re-routing shipments to key export geographies,
adding 10-15 days in travel time, Jain said, to the typical
travel time of 25-30 days to Europe and the United States.
    The comments sparked a 3% drop in the company's share price.
    "Cargo costs have increased significantly, but since I am
able to pass on this price to my customer, it will not have an
impact on my bottom line," Jain said, adding there was no price
sensitivity from buyers.
    R R Kabel's rival Polycab  POLC.NS , which gets about 8% of
its revenue from exports, has also flagged increased delivery
timelines, although Havells India  HVEL.NS , with 3% of revenue
from exports last fiscal year, has seen no impact.
    Jain's comments come a day after R R Kabel posted a drop in
quarterly profit, mainly due to higher copper prices. It did not
flag any impact from the Red Sea crisis on its revenue, which
rose 10% to 16.34 billion rupees ($197 million) in the quarter.
 
 ($1 = 83.0973 Indian rupees)

 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Savio
D'Souza)
 ((Hritam.Mukherjee@thomsonreuters.com; X: @MukherjeeHritam;))