RR Kabel was listed on Indian exchanges on September 20, 2023. Company was incorporated in 1995.
RR Kabel is a reputed name in consumer electrical products used for residential, commercial, industrial, and infrastructure purposes in two major segments
- Wires and cables ~ 89 % revenue (house wires, industrial wires, power cables, and special cables)
- FMEG ~ 11% revenue (Fans, Lighting, Switches, Switchgear and Home & Kitchen Appliances )
Opening this thread as there isn’t one. Find more details on :
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Financials : R R Kabel Ltd financial results and price chart - Screener
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Investor presentation : https://d11j38mwm79wh6.cloudfront.net/wp-content/uploads/2023/11/Investor-Presentation-Q2.pdf (redirected from FY 2023-2024 – RR Kabel)
-see slide 29 for Industry Growth Drivers
Manufacturing units - Located at Waghodia, Gujarat, and Silvassa, Dadra and Nagar Haveli, and Daman and Diu primarily manufacture wire, cables and switches.
Integrated Manufacturing units Located at Roorkee, Uttarakhand; Bengaluru, Karnataka; and Gagret, Himachal Pradesh, primarily manufacture FMEG products.
Outlook:
The wires & cables (W&C) industry is thriving on the government’s thrust on infrastructure and rural electrification, along with growth in commercial and residential sectors, 5G rollout, and digitization. Increasing demand from consumers to upgrade or replace existing products is an added bonus.
Multi billion dollar push and increasing demand for Energy - be is Solar, Wind, Coal, etcetera, puts organized players in Wires & Cables industry in a decent spot for long term.
Additional points:
- 5th largest player in the Indian Wires and Cables(W&C) industry by value in FY23.
- Main competitor - Havells, Polycab, KEI, Finolex
- Electrical conglomerate exports to 65 countries worldwide. (Yet to launch in Africa & South America- No immediate plans- potential trigger)
- Products have 35 international certifications- significant number
Brand Ambassador - Akshay Kumar since 2018
Founder Chairman: Migrated from Bangladesh to Nepal and then back to his roots in India. Rameshwarlal Kabra started RR Kabel in Mumbai. In 2018, he received the Padma Shree honor by the President of India, Ram Nath Kovind, for his work in rural and tribal societies. Padma Shree is fourth highest civilian recognition in Republic of India
Risk analysis & assessment - The company is exposed to following risks
(a) Market Risks
- Interest Rate Risk - Likelihood high, Impact medium
- Foreign Currency Rate fluctuation - Likelihood high, Impact high
- Commodity Price - Likelihood very high, Impact very high
(copper and aluminum prices on the London Metal Exchange)
- Raw material availability risk - Likelihood low, Impact very high
- Counterfeit products - Likelihood high, Impact medium
- Competition - Company does not have significant Moat compared to its peers. Negative.
- Items marketed using the company’s branding by unaffiliated parties may have a detrimental impact on the company’s competitive position. Negative.
- Quality - Company has been particular to obtain right certifications to assist in geographies where it matters the most. Positive. Certifications
- Brand recall/acceptability: Client stickiness is high. Commands 7% share. Onboarding of Electricians who often play role of influencers, grown from 61k to 300K+ in last two years
(b) Liquidity Risk (difficulty in raising fund) - Likelihood low, Impact medium
(c) Credit Risk
- Trade receivable risk - Likelihood high, Impact medium
- Financial instrument risk - Likelihood high, Impact medium
(Hedging methodology of forward contracts/currency swaps is not transparent -applies to raw material imports and exports)
(d) ESG Risks - Likelihood high, Impact medium
The company is forward looking future
ready and resilient to climate and
other ESG risks
Disclaimer:
I have gathered information solely based on publicly available data and have not interacted with company’s management.
I am invested in the company so my views might be biased.