RR Kabel delivered its strongest half-yearly performance in H1 FY26, reporting record net profit growth of 80.9% to ₹206 crore on revenue of ₹4,222 crore. The company's robust performance comes as India's wires and cables market, valued at $9.32 billion in 2024, is expected to nearly double to $17.08 billion by 2032, driven by emerging demand from data centres, renewable energy, and digital infrastructure.

Strong Financial Performance Driven by Core Segment

The company's H1 FY26 results demonstrate significant operating leverage, with key financial metrics showing substantial improvement:

The wires and cables segment, contributing approximately 90% of total revenue, led the growth trajectory with revenue increasing 19.3% to ₹3,805 crore. This growth reflected 16% volume expansion and improved realisations. Segment EBIT rose 64% to ₹320 crore, with margins expanding 230 basis points to 8.4%.

FMEG Segment Shows Improvement Despite Challenges

The fast-moving electrical goods segment faced headwinds in H1 FY26, with revenue declining 2.5% to ₹418 crore due to seasonal factors and lower demand for fans and appliances. However, the segment showed operational improvements:

Management targets EBITDA breakeven for the FMEG segment by Q4 FY26, with further margin improvements planned for the second half.

Project RRise: Strategic Growth Blueprint

RR Kabel's long-term strategy centres on "Project RRise," a comprehensive three-year plan from FY26 to FY28. The ambitious targets include:

• W&C Revenue Growth: 18% CAGR
• FMEG Revenue Growth: More than 25% CAGR
• EBITDA Margins: Target of 10.5% by FY28
• Overall EBITDA Growth: 2.5 times increase over the period

To support this growth, the company plans to invest ₹1,200 crore to expand manufacturing capacity by 1.7 times. The expansion includes adding 36,000 metric tonnes of cable capacity and 6,000 metric tonnes of wire capacity, with 80% of investment allocated to the cables business.

Data Centre Opportunity and Market Position

As India's fourth-largest wires and cables manufacturer by value and leading exporter to over 74 countries, RR Kabel is well-positioned to capitalize on emerging opportunities. The company operates through an extensive distribution network of more than 4,400 distributors, 4,500 dealers, and nearly 1.9 lakh retailers, supported by India's largest electrician loyalty programme with over 5.8 lakh electricians.

Jefferies estimates that adding eight gigawatts of data centre capacity by FY30 will require investments of approximately $30 billion (₹2.7 lakh crore). RR Kabel offers specialized products for data centres, including:

• Aluminium and copper flexible cables
• Low-tension power cables
• Battery cables
• Specialized data and communication cables for high-speed connectivity

The company's five integrated manufacturing facilities across India provide operational flexibility, with the Waghodia and Silvassa plants focusing on wires, cables, and switches, while Roorkee, Bengaluru, and Gagret facilities manufacture FMEG products.

Market Outlook and Valuation

Management targets 18% volume growth in FY26, implying approximately 23-24% growth in the second half, citing a supportive demand environment. The company's capacity utilisation remains high, with wire business operating at about 70% and cable business close to 90%.

At ₹1,502 per share, RR Kabel trades at a price-to-earnings multiple of 42.00, compared with closest peer Polycab at 46.00. The company maintains strong financial metrics with return on capital employed at 19.4% and return on equity at 15.6%. However, elevated copper prices may pressure margins in the near term if costs cannot be passed on to consumers.

RR Kabel Limited has informed stock exchanges about penalty orders received from CGST authorities, totaling ₹34.12 lakhs across two separate proceedings. The disclosure was made in compliance with Regulation 30 of SEBI Listing Regulations.

Penalty Details and Authority

The Office of the Superintendent, Range-III, Division-VIII, CGST CE, Daman, Dadra and Nagar Haveli imposed the penalties through ex-parte orders. RR Kabel received two separate penalty orders with the following details:

Nature of Alleged Violations

The penalties were imposed under Section 122(1)(ii) and (x) of the CGST Act, 2017, read with corresponding sections of the UTGST Act, 2017 and the IGST Act, 2017. The CGST authorities alleged that RR Kabel conducted supplies of goods without actual movement of goods, which forms the basis for both penalty orders.

Company's Response and Impact Assessment

RR Kabel Limited has provided a detailed disclosure in the prescribed format as required under SEBI regulations. The company has stated that other than the payment of penalty amounts, there is no other impact on the financial, operational, or other activities of the company.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of the SEBI Listing Regulations, with detailed information provided in Form A as required under Regulation 30(13). The company has also uploaded this information on its website at www.rrkabel.com as part of its transparency obligations.

Key Information Summary

The company secretary and compliance officer, Anup Vaibhav C. Khanna, has digitally signed the disclosure, confirming that the information provided is true, correct, and complete to the best of the company's knowledge and belief.