RRKABEL Q2 FY27 Earnings Call: Record H1 Revenue Up 53%, Margin Guidance Reaffirmed

RRKABEL held its Q2 FY27 earnings call on October 28, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record H1 with Broad-Based Margin Expansion

• Q2 FY 2026-2027 revenue of Rs.3,284 crore — up 52% YoY vs Rs.2,164 crore in Q2 FY 2025-2026; operating EBITDA ~Rs.286 crore (up 63% YoY) at an 8.7% margin vs 8.1% (~60 bps expansion).
• Q2 PBT ~Rs.242 crore (up 56% YoY) — PAT ~Rs.181 crore (up 55% YoY vs Rs.116 crore), with PAT margin at 5.5% vs 5.4% a year ago.
• H1 FY 2026-2027 revenue of Rs.6,452 crore (up 53% YoY) — the company's highest-ever half-yearly revenue, operating EBITDA and PAT; EBITDA margin expanded ~130 bps to 8.9% and PAT margin to 6.0% vs 4.9%.
• Net working capital cycle improved to 46 days as of September 2026, from 49 days in March 2026 and 50 days in June 2026; management expects the trajectory to remain in the 45-50 days range.
• Interim dividend of Rs.6.50 per share declared by the Board with Q2 FY 2026-2027 results.
• Gross margin contracted ~100 bps in Q2 FY 2026-2027 — attributed to product mix and operating on a high raw material base price level; finance cost also picked up, linked to elevated raw material prices, with no specific normalization timeline committed by end of FY 2026-2027.

Wires & Cables Lead; FMEG Slips Back into Loss

• Wires & cables Q2 FY 2026-2027 revenue ~Rs.3,010 crore (up 53% YoY) — segment profit before tax and interest ~Rs.282 crore (up 57% YoY) at a 9.4% margin vs 9.2%; H1 FY 2026-2027 revenue ~Rs.5,890 crore (up 55% YoY) with margin at 9.6% vs 8.4%.
• Volume growth was high single digit overall in Q2 FY 2026-2027 — wires grew double digits while cables grew single digits (including exports, not domestic-only); domestic cables did not decline but grew slower than wires; management attributed QoQ cable variation to factors such as the monsoon season.
• FMEG revenue grew ~42% YoY in Q2 FY 2026-2027 to ~Rs.274 crore — led by appliances and new products, but the segment posted a ~Rs.12 crore loss (loss margin 4.5% vs 6.1% in Q2 FY 2025-2026) after breaking even in Q1 FY 2026-2027; management attributed the deterioration to the fan-heavy mix and Q2 being seasonally weak for fans.
• H1 FY 2026-2027 FMEG loss narrowed to ~Rs.12 crore from ~Rs.19 crore in H1 FY 2025-2026 (loss margin 2.2% vs 4.5%), aided by scale and better operating cost absorption; cumulative losses of ~Rs.17 crore were cited on the call.
• Management reaffirmed full-year FY 2026-2027 FMEG break-even at the segment profit level, and expects H2 FY 2026-2027 at much higher revenue and profitability levels.

Export Share Rising Toward 35%, Cable-Led

• Q2 FY 2026-2027 exports of approx Rs.1,000 crore (~32% of total sales) — management declined an exact figure but confirmed "approx that range only"; exports outgrew domestic in Q2 FY 2026-2027, which management attributed to strong competitive positioning in international markets.
• Export mix is shifting from wires toward cables as enhanced cable capacity comes online; export growth is majorly coming from the cables segment following new capacity installation, with Europe and Middle East the biggest contributors and growth seen across all continents.
• Export share guided at 30-35% for the remaining half of FY 2026-2027; historically exports were 25-30% of revenue and are now moving toward ~35%; no specific full-year FY 2026-2027 export growth number was provided.
• 3-4 international approvals added each year as a continuous process, with a few more currently in process targeting new markets and new product categories; new additions expected quarter-on-quarter and year-on-year.
• Equal focus on domestic and export markets retained — management said rising domestic competition does not trigger a strategic shift; for FY 2027-2028, exports and domestic may grow at similar speeds.

Heavy Investment Cycle: Rajasthan Land, Usha Martin Cable Deal

• Rs.600 crore FY 2026-2027 capex plan on track (management framed it as Rs.550-600 crore vs the analyst's Rs.600-650 crore), with Rs.281 crore already incurred in H1 FY 2026-2027; this excludes the Rs.77 crore cable capex as its payout is still pending, and the Rajasthan land partial payment is also separate.
• Rs.200 crore land acquisition in Rajasthan approved by the Board — the first step toward new capex, over and above the FY 2026-2027 plan, with outflow expected partly in FY 2026-2027 and partly in H1 FY 2027-2028; a detailed capex plan will be shared after one or two quarters.
• Business transfer agreement signed 25 September 2026 with Cables Limited, a wholly owned subsidiary of Usha Martin Limited, for its optical fiber and related cables business at ~Rs.77 crores, subject to post-closing adjustments and condition precedent; not recognized in results as of September 2026. Management said it is too early to outline a 2-4 year plan — a detailed business plan is expected by Q3 FY 2026-2027; the plant is running at very low capacity utilization, and no plan for EM Cable capex exists as of the Q2 FY 2026-2027 call.
• Debt to rise from ~Rs.500 crore currently — management confirmed "there will be some increase in debt," responding to the analyst's suggestion of budgeting another Rs.200-250 crore in FY 2026-2027; a ~Rs.200 crore increase in long-term borrowing vs the FY26 level was clarified as funding the ~Rs.600 crore FY 2026-2027 capex, not the Rajasthan land.
• ~Rs.300 crore capex indicated for FY 2027-2028, with management noting "some plus minus" is possible; the Roorkee plant shift is planned with no disruption to current production, and the Rudki relocation will involve no large capex.
• Trade acceptances up ~3x in FY26 to ~Rs.1,100 crore and still rising (flagged by the Motilal Oswal analyst, driving higher interest cost) — COO Rajesh Jain said the majority of metal purchases are now on LC-backed trade facility, with an overall LC-backed amount of ~Rs.1,290 crore in H1 FY27, framed as efficient use of working capital; current debt leverage of ~0.55% (as stated) was described as quite healthy.

Volume Guidance Trimmed; Margin Path Reaffirmed

• FY 2026-2027 volume growth guidance fine-tuned from ~16-18% to ~15% — management characterized it as "just few basis points only" with no fundamental change in industry or company growth plans; cable & wire segment growth guided at ~14-15% on a real basis for FY 2026-2027.
• Margin guidance reaffirmed: ~100 bps of EBIT margin improvement over three years spanning FY26-FY28 — wire & cable EBIT margin targeted at 9.5% for FY 2026-2027 (H1 FY 2026-2027 actual at 9.6%) and approximately 10.5% for FY28.
• Management expressed confidence in the H2 FY 2026-2027 volume plan even on a higher base, noting H2 seasonally sees higher volumes; the analyst cited prior-year H2 strength (Q3 ~30% volume growth, Q4 double-digit) as context, and management did not endorse the analyst's inference of high-teens H2 growth.
• Management declined FY28 volume growth visibility, citing volatile market conditions, and reiterated only that it will keep focusing on its volume growth plans; detailed FY 2027-2028 guidelines may be provided in Q3 FY 2026-2027.
• Optic fiber asset: no meaningful FY 2026-2027 revenue contribution should be assumed — controls of the business are yet to be achieved, and the analyst's Rs.50-60 crore per quarter for H2 FY 2026-2027 (referencing an Rs.80 crore run rate) was not endorsed by management.
• Competition and commodity prices remain key watch items — HSBC's Sandesh Shetty cited market talk of increased competitive intensity from September 2026 due to the entry intent of a new competitor; COO Rajesh Jain said competition has always been part of business and RR Kabel will keep growing per its own plans; management remains attentive to commodity price movements and their impact on realizations and margins.

Industry Fundamentals Seen Supporting Organized Players

• Management cited India's sustained focus on infrastructure development, power and electrification, housing, and industrial investments as structural drivers supporting the long-term growth prospects of the wires and cables industry.
• Global uncertainties and evolving market dynamics remain factors to watch — while industry fundamentals are seen as strong, providing significant opportunity for organized players like RR Kabel.
• Peers reporting low volumes amid heavy capacity additions (flagged by analyst Patanjali Srinivasan, Sundaram Mutual Fund) — COO Rajesh Jain responded that RR Kabel remains "quite confident" of its growth plans, sees good growth in both domestic and export markets, and said the company has been doing better than the industry and expects to keep performing at that level.