RR Kabel Targets Double-Digit Margin In Three Years
The company has devised a two-pronged hedging mechanism to deal with the challenges of volatile copper prices.
RR Kabel, one of India's leading players in the wires and cables sector, is confident of maintaining its robust growth trajectory amid volatile raw material prices and rising competition. It is targeting double-digit EBIT margins over the next two to three years, according to Chief Operating Officer Rajesh Jain.
“We have planned to achieve double-digit margins in the next two to three years. Last year, my wire and cable EBIT margins were in the range of 7.4% and we have targeted improving them by 100 to 110 bps, and we are on track. We hope that in H2, we will do further improvement and achieve this kind of growth,” he said during a conversation with NDTV Profit on Monday.
To support its growth ambitions, RR Kabel has planned a total capex of Rs 1,200 crore over the next three years.
Jain explained that the investment will heavily focus on expanding the cable segment. He outlined that while the wire segment is operating at about 70% capacity utilisation, the cable segment is already running at 90% utilisation, necessitating an urgent expansion of capacity.
“We have planned for Rs 1,200 crore capex over the next three years. Our major focus will be on expanding cable capacity, since our capacity is very low in terms of market size and growth expansion,” he added.
A key focus for investors will be the company's handling of copper price volatility, a primary raw material. RR Kabel employs a dual hedging strategy to deal with fluctuations in copper prices.
“We have two mechanisms for copper price hedging. We have B2B business or export business where we have 100% back-to-back coverage. Whatever my customers place an order, we cover. And that business is risk-free,” Jain said.
“When the B2C category is concerned, there is like a practice where whenever there is an upward or downward movement of, say, 2% to 3%, we change our list price as well. There is a time gap,” he added.
The company reported over 22% year-on-year (YoY) growth in its core wires and cables business for the first half of FY26, with volume growth hitting 16%. Profit after tax surged by a massive 134.7% YoY to Rs 116.3 crore in Q2FY26.
On being asked about volume growth projections for Q3, Jain said. “We are targeting to achieve volume growth of 18% on a YoY basis. And we are on line with our targets.”
