RR Kabel reported a 33% decline in its second-quarter profit, impacted by higher copper prices and a slowdown in demand for electrical goods. The company’s consolidated profit for the quarter ending September 30 dropped to ₹49.53 crore, down from ₹74.1 crore in the same quarter last year.
Key Financial Highlights:
- Revenue: Despite a 12.5% increase in revenue to ₹1,810 crore, the company’s expenses surged to ₹1,757 crore from ₹1,520 crore, driven largely by a 7% rise in raw material costs, including copper.
- Copper Price Impact: The rising cost of copper, a key raw material for cable and wire manufacturers, has put pressure on profitability. Copper prices have increased by more than 10% in 2024, reaching record highs earlier this year.
Industry Impact:
Cable and wire manufacturers like RR Kabel are experiencing strong demand from the real estate and infrastructure sectors, supported by government initiatives to boost the economy and promote affordable housing. However, the surge in raw material costs has severely affected the earnings of consumer goods makers.
Analysts pointed out that the demand for fast-moving electrical goods such as fans and coolers has softened due to inflation and seasonal factors, leading to lower sales in the second quarter.
Market Reaction:
Earlier this month, competitors Polycab and Havells India also reported second-quarter profits that missed expectations due to rising costs. As of 11:34 am, RR Kabel’s shares were trading 3.115% lower at ₹1,549.80 on NSE, reflecting the market’s reaction to the disappointing results.
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