Budget 2024: Govt focus on Infrastructure, housing for all, to boost demand for cable & wire industry- R R Kabel

Budget 2024: Rajesh Jain Chief Financial officer of R R Kabel Limited in talks with Mint said that Government continued focus on Infrastructure development and housing for all in the budget will drive growth for cable and wire industry.

The demand for cable and wires remains remains strong and apart from infrastructure and housing for all, the focus on renewable energy (Solar and wind) and also Electric vehicle push is favorable.

RR Kabel had reported strong 18.4% year on year revenue growth for wires and cables segment during first nine months of FY24 and 19.7% growth in the fast moving electric goods (FMEG) segment. It is targeting to finish the year with with a growth of 20% year on year.

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R R Kabel Ltd had reported revenues of Revenue from operations at  Rs. 1,633.5 crores during the December quarter had grown 10% year on year and 1.5% sequentially. The earnings before interest tax depreciation and amortisations (Ebitda) at Rs. 112.6 crores however declined 5.8% y-o-y and 7% sequentially. 

Kabel's Jain said that operational performance can remain impacted in a particular quarter as pass through of costs may take some time. The copper costs had risen during the costs and pass through could have been delayed. However Jain said that the company is committed to achieving 140 bps margins improvement for the year as a whole during FY24. first nine months has seen Ebitda margins grow 173 basis points.

The fourth quarter is strongest for the company and the industry as a whole.

The demand remains soft in the Fast moving electrical goods space. The demand remains impacted and could also be due to lower liquidity feel Jain. The competition is high and seasonal factors had impacted growth in products as fans. 

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The FMEG growth should however improve moving forward.

R R Kabel is stocking to its capex plans of ₹500 Crore during FY24 and FY25 and planning for FY26 too. To grow at 20% , the Capex needs to continue , said Jain.

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· Profit Before Tax (PBT) : Rs. 95.9 crores

· Profit After Tax (PAT) : Rs. 71.0 crores 

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