- Motilal Oswal upgraded RR Kabel stock from neutral to buy with a Rs 2,600 target price
- EPS estimates for RR Kabel raised by 11% for FY27-28 due to growth and margin expansion
- Revenue and EBIT CAGR for RR Kabel projected at 21% and 22% over FY26-28 respectively
Shares of RR Kabel will be in focus during Thursday's trading session as domestic brokerage Motilal Oswal Financial Services has upgraded the stock from 'neutral' to 'buy'. Analysts have pegged a target price of Rs 2,600 from the current levels of Rs 2,236 and have raised the EPS estimate by 11%. ''We raise EPS estimates for RR Kabel by 11% for FY27-28 (each), given the stronger revenue growth outlook supported by capacity expansions, market share gain, and margin expansion,'' said Motilal Oswal.
The brokerage has also revised revenue estimates for RR Kabel. ''We estimate revenue/EBIT CAGR at 21%/22% over FY26-28 for our coverage companies vs. revenue/EBIT CAGR of 23%/24% posted over FY24-26. We project EBIT margins at 12.3%/12.7% in FY27/FY28 vs. 12.4% in FY26, driven by an increase in the scale of operations, higher contribution from power cables, and exports contribution,'' said Motilal Oswal on RR Kabel.
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Motilal Oswal bullish on cables & wires sector
The brokerage believes that the Indian cables and wires industry will expand at nearly 13-14% CAGR over FY26-30 driven by an increase in the scale of operations, higher contribution from power cables, and exports. Analysts believe that the sector's demand tailwinds will remain intact over the long term with strong growth outlook and margin expansion, which is a key positive for RR Kabel.
According to Motlal Oswal, the real estate sector remains one of the largest demand drivers for the industry, particularly for building wires. India's real estate market is expected to grow from USD200 billion in 2021 to USD1.0 trillion by 2030, implying a CAGR of 19.5%, supported by rapid urbanization, rising household incomes, infrastructure development, and increasing electrification.
Residential real estate alone accounts for 35% of industry applications, with housing wires representing one of the largest end-use segments. Demand for C&W is closely linked to construction activity across residential, commercial, and institutional real estate. ''Every new housing project, office building, hospital, hotel, retail complex, and IT park requires extensive electrical infrastructure for power distribution, lighting, safety systems, and digital connectivity,'' said the brokerage.
In addition to sustained residential demand, the recovery in commercial real estate is driving incremental demand from offices, hospitals, hotels, and IT parks, supporting broad-based growth for the industry. Additionally, the rapid growth of AI workloads, hyper-scale facilities, and cloud infrastructure is expected to further strengthen long-term demand for specialized cables.
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