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Prabhudas Lilladher Report
We initiate coverage on RR Kabel Ltd. with a ‘Buy’ rating and target price of Rs 1407 valuing at 35 times FY25 earnings. We believe RR Kabel is a play on several opportunities in the wires and cables segment given-
strong brand with diverse product portfolio,
well-structured capacity expansion plans,
increasing dealers /distribution network and
distribution led export business.
Although the company has grown its fast moving electrical goods portfolio inorganically, yet it expects to minimise losses in coming years by transitioning towards premium markets. In FMEG, too, RR Kabel has enhanced its brand presence, positioning and manufacturing capabilities to minimize losses.
We estimate revenue/Ebitda/profit after tax compound annual growth rate of 20.7%/38.8%/44.3% over FY23-26 led by-
improving business mix,
operating leverage and cost optimisation,
investments in brand building and
increasing distribution reach.
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