RR Kabel delivers 64% profit surge in Q4 FY25 amid rising demand for electrical infrastructure

Why Did RR Kabel Report Strong Earnings in Q4 FY25?

RR Kabel Limited, India‘s leading wire and cable exporter and a fast-growing contender in the fast-moving electrical goods (FMEG) sector, posted a consolidated net profit of ₹129.1 crore for Q4 FY25, marking a sharp 64% increase year-on-year. The performance underscores the company’s robust operational momentum, driven by continued infrastructure demand, improved input costs, and product mix enhancements.

Revenue from operations for the quarter rose 26.4% to ₹2,217.8 crore compared to ₹1,754.1 crore in Q4 FY24. Operating EBITDA surged 69.4% year-on-year to ₹195.8 crore, with margins expanding by 224 basis points to 8.8%. Profit before tax nearly doubled to ₹173.2 crore from ₹105.7 crore last year, while profit after tax margins rose to 5.8% from 4.5% previously.

These gains come at a time when India’s infrastructure and residential electrification sectors are showing sustained growth under the “Make in India” and “Smart Cities” initiatives. RR Kabel’s consistent investment in capacity and channel expansion appears to be yielding strong financial returns.

How Did the Wires & Cables Business Fuel the Q4 Profit Jump?

The company’s core Wires & Cables (W&C) segment was the main engine of growth in Q4 FY25. The segment contributed 88% of total quarterly revenue and saw ~28% year-on-year growth. This performance was attributed to strong demand from infrastructure, industrial, and residential projects, coupled with stabilising copper prices, which helped improve realization levels.

The segment’s profit improved by approximately 47% compared to the previous year, benefiting from improved operational efficiency and strategic capacity expansion. These developments reinforced RR Kabel’s positioning as India’s No.1 exporter of cables, with a growing share of the domestic market.

Managing Director Shreegopal Kabra noted indirectly in the release that the company continues to focus on scaling volumes while maintaining margin discipline and enhancing value-added product lines. Analysts interpreted this as a signal that the company is doubling down on its high-growth vertical.

What’s the Outlook for RR Kabel’s FMEG Segment?

While still smaller in contribution, the Fast-Moving Electrical Goods (FMEG) division showed noticeable improvement in Q4 FY25. Revenue in the segment grew by approximately 13% year-on-year in the quarter and 22% for the full year, aided by strong volume growth in fans, switches, and appliances.

More importantly, the segment’s losses narrowed substantially, owing to improved operational efficiencies, tighter cost control, and a better product mix. Though it remained loss-making at the segment level, the trend points toward profitability over the next few quarters.

The company attributed this momentum to its omni-channel approach, growing distribution network, and focused investments in product development. According to internal views reflected in the investor release, the company aims to plug portfolio gaps to drive incremental volume-led growth.

What Do Full-Year FY25 Results Indicate?

For the full fiscal year ending March 31, 2025, RR Kabel reported a consolidated revenue of ₹7,618.2 crore, representing a 15.5% increase over FY24’s ₹6,594.6 crore. Full-year operating EBITDA came in at ₹487.7 crore, up 5.4% from ₹462.8 crore in the previous year. Net profit rose 4.5% to ₹311.6 crore from ₹298.1 crore.

However, EBITDA margin declined to 6.4% from 7.0%, and PAT margin fell to 4.1% from 4.5%. This slight margin compression was attributed to inflationary pressures on input costs and incremental investments in brand-building and sales channels.

Despite this, analysts remain optimistic about the company’s trajectory, citing its ability to generate double-digit revenue growth even in a margin-challenged environment.

What Is the Current Sentiment Around RR Kabel Stock?

As of the market close on May 2, 2025, RR Kabel’s stock price stood at ₹1,023.80 on NSE, registering a modest 2% decline for the day. While the company’s financial performance was robust, the stock has underperformed over the medium term, with a 38.93% drop over the past year and a 33.08% decline in the last six months.

Currently trading at approximately 46% below its 52-week high of ₹1,901.95, the stock reflects a disconnect between market sentiment and fundamental performance. This disparity presents a contrarian opportunity for long-term investors, especially as the company moves closer to segment-wide profitability.

What Are FIIs and DIIs Doing with RR Kabel Shares?

Foreign Institutional Investors (FIIs) reduced their holdings in the company during the March 2025 quarter, dropping from 7.83% to 7.17%. This pullback may reflect broader risk-off sentiment across emerging markets or concerns around execution timelines in RR Kabel’s FMEG segment.

Conversely, Domestic Institutional Investors (DIIs) increased their stake from 14.33% to 14.75%, suggesting sustained domestic confidence in the company’s fundamentals. This divergence in FII/DII activity may signal near-term volatility but longer-term stability.

What’s the Valuation Picture?

RR Kabel is currently trading at a P/E ratio of 38.83 and a P/B ratio of 5.38, indicating a premium valuation relative to industry peers. However, analysts argue that this valuation is justified by the company’s strong return ratios, leadership in the W&C segment, and future potential in FMEG.

The street consensus sets a 12-month price target of ₹1,442, suggesting a ~41% upside from current levels. Brokerages tracking the company maintain a “Buy” rating, contingent on continued margin expansion and an FMEG turnaround.

Should You Buy, Hold, or Sell RR Kabel Stock?

Buy: Long-term investors with a medium to high risk appetite may find RR Kabel attractive given its sector-leading fundamentals, particularly in the cable segment. If the FMEG business achieves profitability in FY26, the stock may see re-rating potential.

Hold: Those already holding the stock may choose to remain invested, awaiting more evidence of segment profitability and broader market recovery. Technical charts show a potential bottoming-out, but confirmation depends on the next earnings cycle.

Sell: Investors with low risk tolerance or short-term investment horizons might consider trimming exposure due to the high P/E valuation and underwhelming stock performance over the past year.

What’s Next for RR Kabel?

Looking ahead, RR Kabel’s key priorities include enhancing automation and capacity at its cable plants, expanding its product mix in FMEG, and improving channel reach in semi-urban and rural markets. With India’s electrification drive and real estate expansion underway, demand for wires, cables, and electrical accessories is set to remain strong.

Analysts expect the company to focus on margin improvement and cost optimization, with a specific goal of lifting consolidated EBITDA margin above 9% by FY26. The company may also explore strategic partnerships or M&A opportunities to accelerate its FMEG growth.

If these targets are met, RR Kabel could transition from being seen as a dominant wires and cables exporter to a full-fledged consumer electrical powerhouse, capable of challenging incumbents in the organized FMEG market.

What’s the Market Signal?

• Stock Trend: Down 39% YoY, near-term sentiment cautious

• FIIs: Reduced stake—risk averse

• DIIs: Increased stake—value conviction

• Valuation: Premium (P/E ~39x), justified only if growth sustains

• Rating: Analyst consensus leans “Buy” with ₹1,442 target

• Short-Term Watchpoints: Margin trends, FMEG loss narrowing

• Long-Term View: Positive—if margin expansion continues and FMEG turns profitable