⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
RRKABEL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | RRKABEL | Market Cap | 15,576 Cr. | Current Price | 1,377 ₹ | High / Low | 1,563 ₹ |
| Stock P/E | 33.7 | Book Value | 206 ₹ | Dividend Yield | 0.44 % | ROCE | 19.7 % |
| ROE | 15.2 % | Face Value | 5.00 ₹ | DMA 50 | 1,416 ₹ | DMA 200 | 1,352 ₹ |
| Chg in FII Hold | 0.22 % | Chg in DII Hold | 0.07 % | PAT Qtr | 130 Cr. | PAT Prev Qtr | 116 Cr. |
| RSI | 42.7 | MACD | -27.8 | Volume | 4,28,269 | Avg Vol 1Wk | 2,23,779 |
| Low price | 750 ₹ | High price | 1,563 ₹ | PEG Ratio | 2.48 | Debt to equity | 0.17 |
| 52w Index | 77.1 % | Qtr Profit Var | 91.1 % | EPS | 39.7 ₹ | Industry PE | 17.9 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹130 Cr, up from ₹116 Cr, showing steady growth. EPS at ₹39.7 indicates solid earnings power.
- Margins: ROCE at 19.7% and ROE at 15.2% reflect strong efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.17 shows low leverage, enhancing financial stability.
- Cash Flows: Healthy operating cash generation implied by consistent profitability and low debt.
💹 Valuation Indicators
- P/E Ratio: 33.7, significantly higher than industry average of 17.9, suggesting premium valuation.
- P/B Ratio: Current price ₹1,377 vs. book value ₹206 → ~6.7x, expensive relative to assets.
- PEG Ratio: 2.48, indicating valuation is stretched compared to growth prospects.
- Intrinsic Value: Current valuation appears above intrinsic worth, offering limited margin of safety.
🏢 Business Model & Competitive Advantage
- RR Kabel operates in wires, cables, and electrical solutions with a diversified product portfolio.
- Competitive advantage lies in brand recognition, distribution strength, and product innovation.
- Business model benefits from infrastructure growth and rising demand for electrical goods.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹1,250 – ₹1,300, closer to DMA200 and support levels.
- Long-Term Holding: Strong fundamentals and low debt make it suitable for long-term investors, though current valuation is on the higher side.
✅ Positive
- Strong ROCE (19.7%) and ROE (15.2%).
- Low debt-to-equity ratio (0.17) ensures financial resilience.
- Quarterly PAT growth from ₹116 Cr to ₹130 Cr.
⚠️ Limitation
- High P/E ratio compared to industry average.
- PEG ratio of 2.48 suggests stretched valuation.
- Dividend yield of 0.44% is modest.
📉 Company Negative News
- Valuation premium may limit near-term upside.
- Stock trading below DMA50 indicates weak momentum.
📈 Company Positive News
- Quarterly profit variation of 91.1% YoY highlights strong growth momentum.
- FII holding increased (+0.22%) and DII holding increased (+0.07%), showing institutional confidence.
- Strong 52-week performance with 77.1% gain.
🏭 Industry
- Electrical equipment and cables industry trades at industry PE of 17.9, much lower than RR Kabel’s valuation.
- Sector growth supported by infrastructure expansion and housing demand.
🔎 Conclusion
- RR Kabel is financially strong with solid return ratios and low debt.
- Valuation is stretched, limiting near-term upside, but long-term prospects remain positive given industry growth.
- Best suited for long-term investors with entry around ₹1,250 – ₹1,300 offering a reasonable margin of safety.
I can also prepare a side-by-side HTML comparison of RR Kabel versus Polycab to highlight valuation and profitability differences in the cables and wires sector. Would you like me to draft that next?