RR Kabel, which saw stock market listing on September 20, has been rising since its listing on BSE and NSE. It is now higher by over 15 per cent from its issue price. The shares of the wires and cables company started trading at Rs 1,179 on BSE and Rs 1,180 on NSE on September 20, compared with the issue price of Rs 1,035 per share.
Brokerage house Prabhudas Lilladher initiated coverage on RR Kabel shares with a ‘Buy’ call and a target price of Rs 1,407 per share, valuing at 35x FY25 earnings. The target price is about 20 per cent upside from Thursday’s closing price.
Praveen Sahay, research analyst at Prabhudas Lilladher Pvt Ltd believes that RR Kabel is a play on several opportunities in the wires and cables (W&C) segment given strong brand with diverse product portfolio, well-structured capacity expansion plans, increasing dealers /distribution network and distribution led export business.
He is bullish on RR Kabel due to 1) a strong brand with a diverse product portfolio 2) well-structured capacity expansion plans, 3) an increasing dealers /distribution network, and 4) a distribution-led export business.
RR Kabel is India’s fastest-growing consumer electric company over FY21-FY23 and the fifth largest in the wires and cable space with a branded value market share of 7 per cent at FY23-end.
Its revenue, EBITDA and PAT grew at a CAGR of 31 per cent, 16 per cent and 16 per cent respectively over FY20-23. Analysts estimate the same to grow at a CAGR of 16 per cent, 33 per cent and 36 per cent, respectively, over FY23-26.
The company proposes to utilise the net proceeds towards the funding of repayment or prepayment, in full or in part, of borrowings availed by the company from banks and financial institutions estimated to be Rs 170 crore.
RR Kabel became the first company to see T+2 listing in the Indian primary markets as the shares began trading three days after their IPO closed for subscription.
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