R R Kabel (RRKABEL)

FairStock Score: 70/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• High profitability with ROE of 21.06% and ROCE of 19.77%
• Strong growth record: 5-year revenue CAGR of 22.84% and profit growth of 32.87%
• Very low leverage with debt-to-equity of 0.17
• Piotroski F-Score of 8/9 and Altman Z-Score of 6.84 indicate robust financial health
• Positive free cash flow of ₹325 Cr and promoter holding of 61.65%

Concerns

• Expensive valuation: P/E of 37.80, P/B of 7.52, and EV/EBITDA of 29.93
• Graham Number of ₹600.41 implies a negative margin of safety of -160.26%
• Dividend yield is low at 0.38%, so returns depend entirely on continued growth
• Stock has fallen sharply from 52-week high of ₹2,848 to ₹1,431.75, signaling possible derating or execution concerns

AI Analysis

RR Kabel is a quality compounder, but I have to put Graham's ruler beside it. Five-year revenue CAGR of 22.84%, latest sales growth of 15.73%, and profit growth of 32.87% are impressive. A 21.06% ROE and 19.77% ROCE, with debt-to-equity of just 0.17, tell me this is not a leveraged illusion. Promoter holding of 61.65% aligns ownership with minority shareholders. The Piotroski score of 8/9 and Altman Z-Score of 6.84 show strong financial health, and positive free cash flow of ₹325 Cr supports the operating quality. FairStock calls it STEADY, and I agree on the business side. But as an investor, I buy at a price, and price matters. At ₹1,431.75, the market cap is ₹17,673 Cr, which means I am paying 37.80 times trailing earnings, 7.52 times book value, and 29.93 times EV/EBITDA. That is a rich price for any business, let alone one in the competitive cables industry. Graham's Number is only ₹600.41, giving a margin of safety of negative 160%. That is the opposite of Graham's counsel. The stock has fallen from its 52-week high of ₹2,848 to ₹1,431.75, so the market has already repriced some optimism. The PEG ratio of 0.31 and DCF value near ₹1,540.14 suggest that if growth continues, the stock may be reasonably valued, but investment decisions cannot rest on 'if'. I want a cushion; today's price does not give me one. A wonderful business can still be a poor investment when purchased without margin of safety.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer