# 1. Financial Performance ## A. Key Figures * Revenue: ₹2,536 Cr Q3 FY'26 (+42.3%) · ₹6,758 Cr 9M FY'26 (+25.1%) * **EBITDA:** ₹206 Cr Q3 FY'26 (+86%) · ₹526 Cr 9M FY'26 (+80%) * **PAT:** ₹118 Cr Q3 FY'26 (+4%) · ₹324 Cr 9M FY'26 (+7%) * **Cost of Borrowing:** **7%** (mix of export and domestic facilities), in line or better than peers ## B. Revenue Growth * **Record 9-Month Performance:** Strongest revenue, profitability, and PAT in company history, led by wires & cables segment and resilient infrastructure demand. * **Volume and Pricing Tailwinds:** Q3 growth supported by higher volumes and improved realizations amid elevated commodity prices. ## C. Profitability Trends * **Robust Margin Expansion:** EBITDA margin improved significantly beyond target, reflecting strong operating leverage, cost absorption, and efficiency gains despite input cost volatility. * **Healthy Bottom-Line Growth:** PAT growth lagged EBITDA expansion due to tax and other non-operating factors, but still reached record 9-month levels. ## D. Working Capital * **Stable Working Capital Cycle:** Days held flat at **56 days** in 9M, with creditor days increase to **42 days** reflecting strategic management during price upticks. * **Efficient Receivables Management:** Export collections secured via LCs with **30–60 day cycles**, supporting cash flow predictability. * **Forward Guidance:** Target to maintain working capital cycle within **50–60 days** range. ## E. Cost of Borrowing * **Favorable Financing Environment:** Lower interest rates and moderated inflation reduced borrowing costs and boosted housing and infrastructure activity. * **Efficiency Offsets Staff Inflation:** Despite expansion needs, staff costs expected to stabilize as % of revenue due to **automation**; annual base at **₹400 Cr**. --- # 2. Volume & Demand Trends ## A. Key Figures * **Volume Growth:** **30%** QoQ domestic · **17–18%** YoY (9M) * **Domestic Growth:** **>30% volume** · **>50% value** * **Export Volume Growth:** **~25%** * **Industry CAGR Outlook:** **14–15%** (CY26) ## B. Domestic Volume * **Strong Macro Tailwinds:** Robust domestic momentum in consumption, investment, and manufacturing supported by improved financial conditions, rising household confidence, and post-tax income normalization. * **Infrastructure-Led Demand:** Favorable economic environment particularly benefits long-cycle sectors such as infrastructure, housing, and electrification, aligning with company’s core exposure. * **Outperformance vs. Market:** Domestic volume and value growth significantly exceeded industry trends, reflecting strong execution and market share gains. ## C. Export Volume * **Global Stabilization:** Despite geopolitical headwinds and trade volatility, global macro conditions showed signs of normalization, restoring predictability in export markets. ## D. Segment Demand * **Broad-Based Strength:** Wires & cables demand surged across real estate, industrial, and export segments, underpinning strong quarterly performance. * **Structural Growth Intact:** Industry outlook remains robust with **14–15% CAGR** expected, driven by sustained consumption and long-term infrastructure development, despite minor short-term inventory fluctuations. --- # 3. Segment & Product Performance ## A. Key Figures * **Wires & Cables Revenue:** **₹2,293 Cr** Q3 FY'26 (+6%) · **₹1,543 Cr** Q3 FY'25 * **Wires & Cables Segment Profit:** **₹199 Cr** Q3 FY'26 (+9%) · **₹108 Cr** Q3 FY'25 * **FMEG Revenue:** **₹243 Cr** Q3 FY'26 (flat) · **₹240 Cr** Q3 FY'25 * **FMEG Loss:** **₹5 Cr** Q3 FY'26 ## B. Wires & Cables * **Robust Volume-Led Growth:** Strong double-digit revenue and profit expansion driven by over 30% volume growth in both wire and cable lines, supported by domestic and export demand. * **B2C Dominance with Strategic B2B Shift:** Despite 70% of segment revenue coming from B2C, company is prioritizing **significant capex in B2B**, aligning with market structure where cables drive 65% of industry value. * **Margin Tailwinds:** Profitability improved on operating leverage, pricing discipline, and cost control, partially offsetting commodity-linked input volatility. ## C. FMEG Business * **Stabilization Amid Weak Demand:** Segment achieved meaningful loss reduction despite flat revenue and softness in discretionary categories, particularly fans, reflecting effective cost rationalization. * **Focused Portfolio Strategy:** Business remains concentrated on core consumer products with **50% revenue from fans**, **32% from lighting**, and **18% from appliances/switchgears**, while maintaining a **20% premium/mid-premium mix**. * **Efficiency Over Expansion:** No plans for job work or vertical integration; production mix remains **one-third in-house, two-thirds outsourced**, with losses tightly controlled at ₹5 Cr in Q3. --- # 4. Capacity & Capex ## A. Key Figures * **Capacity Utilization:** **70%** wire side · **90%** cable side * **Capex Plan:** **₹1,200 Cr** over 3 years (80% to cable segment) * **Capex Incurred (9M):** **₹280 Cr** in wires & cables business ## B. Capacity Utilization * **Phased Expansion Execution:** Capacity additions progressing in a staggered manner, with the company on track to meet its fixed asset and utilization roadmap. * **Asymmetric Utilization:** Cable operations running at high utilization (**90%**), while wire capacity remains under less pressure at **70%**, indicating divergent demand trends. * **Distribution Scale:** Extensive network of **6,000+ dealers/distributors** and **~150,000 retail points** supports reach; focus on deepening presence in underpenetrated regions. ## C. Capex Plan * **Growth-Funded Expansion:** Multi-year ₹1,200 Cr capex program targets **18% annual volume growth**, with majority allocation to high-utilization cable segment. * **Execution Momentum:** Nearly ₹280 Cr capex deployed in first 9 months, aligning with planned investment pace and financial discipline. * **Strategic Diversification:** Capacity build-out includes entry into **new geographies and product lines**, aimed at capturing export opportunities. --- # 5. Export & Geography Mix ## A. Key Figures * **EU Exports:** **40%** of total exports * **Export Product Mix:** **70% wires, 30% cables** * Tariff Impact: 3.7% → 0% expected on wire and cable exports to EU ## B. EU Trade Deal * **Major Tariff Relief Ahead:** Pending EU trade deal set to eliminate **7% tariff** on wire and cable exports within ~12 months, providing a significant competitive and margin tailwind. * **Strategic EU Exposure:** Nearly half of export volume directed to Europe, positioning the company as a key beneficiary of improved market access. ## C. Export Pricing * **Pricing Discipline:** Export prices updated via periodic price lists, though specific accounting treatment remains undisclosed. ## D. Regional Growth * **Cable-Led Export Expansion:** Future export growth to shift toward **cables** amid capacity upgrades and product innovation, altering current product mix dynamics. * **Outperformance Outlook:** Exports expected to grow faster than domestic business medium-term, driven by U.S. opportunities despite short-term tariff headwinds. * **Market Penetration Push:** Aggressive **ATL/BTL marketing and distribution expansion** underway to overcome regional entry barriers and challenge entrenched players. * **Competitive Landscape:** All major players have regional strongholds; R R Kabel is actively broadening reach even in mature markets. --- # 6. Pricing & Input Cost Risks ## A. Key Figures * Copper Price Movement: Up 20% to 25% in one quarter; $10,000 scenario was hypothetical * **Inventory Levels:** Normal at **25–30 days** · Current up by **+5 to 7 days** · Max unlikely to exceed **45 days** * **Product Cost Share:** **1% to 5%** of total project costs (Category C item) ## B. Copper Volatility * **Market-Wide Pressure:** Sharp **quarterly surge** in copper prices drove working capital strain and demand volatility, with prices still rising into January. * **Margin Risk Outlook:** Unpredictable metal swings—including past **25% moves**—pose a sustained margin risk over the next **two to three quarters** if volatility continues. * **Demand Resilience:** Final-product demand remains stable due to low cost share in projects, though **stocking activity** may pause temporarily if prices fall sharply. ## C. Price Pass-Through * **Dynamic Pricing Model:** Company employs **continuous price adjustments**—ranging from weekly to multi-month stability—aligned with metal cost trends to protect margins. * **Recent Pricing Activity:** Implemented **five price increases in two months** (two in December, three in January) amid persistent upward cost pressure. * **Back-to-Back Mechanism:** Operates on **100% back-to-back booking**, eliminating input cost pass-through risk and ensuring margin integrity despite short-term volatility. ## D. Inventory Impact * **Channel Stocking Boost:** Elevated inventory levels—driven by **20% to 25% value increase**—supported near-term sales despite financing constraints. * **Inventory Finance Cap:** High carrying costs limit maximum channel inventory to **~45 days**, preventing excessive buildup even during price hikes. --- # 7. Guidance & Outlook ## A. Key Figures * EBIT Margin Target: 10.5% in wires & cables by FY28 (100 bps annual improvement) * **FMEG EBIT Breakeven:** Expected **Q4 FY26** * **FMEG EBIT Margin Target:** **5%–6%** by FY28 * **Long-Term Revenue Growth Target:** **8.5%** annual * **FMEG Growth Outlook:** **25% CAGR** projected over next 3 years ## B. Margin Targets * **Stable Near-Term Margins:** Fourth-quarter margins expected to hold steady if raw material prices stabilize, in line with annual guidance. * **Structural Margin Improvement:** Confirmed path to **100 bps annual EBIT margin expansion**, with 5% target in wires & cables by FY28. ## C. Growth Projections * **Resilient Sector Fundamentals:** Long- and medium-term demand in India’s electrical sector underpinned by infrastructure, housing, and formalization trends. * **Sustainable Growth Trajectory:** Company maintains long-term **5% annual growth target** despite near-term volatility and forecasting challenges. ## D. Breakeven Timeline * **FMEG on Track for Breakeven:** EBIT breakeven expected in **Q4 FY26**, with margin expansion to 5–6% targeted by FY28. * **High-Growth Segment Ramp-Up:** FMEG poised for **25% CAGR** over three years, signaling strategic scale-up and margin maturation.