India's R R Kabel Q1 profit falls as costs surge

BENGALURU (Reuters) - India's R R Kabel posted a 13.4% fall in first-quarter profit on Tuesday as a rise in expenses hurt margins.

The company's consolidated profit fell to 643.8 million rupees ($7.7 million) for the three months ended June 30, from 743.5 million rupees a year earlier.

Total expenses surged about 15%, overshadowing a 13% rise in revenue from operations.

For the full result highlights, click: [Full story]

KEY CONTEXT

Wire and cable companies continue to see strong demand from the housing sector, which is in the middle of a boom. This has helped offset a weakness in infrastructure due to slowdown in construction activities owing to general elections, analysts have said.

However, higher prices of key raw materials, including copper and aluminum, have taken a large bite off of the consumer durable goods makers bottomline.

Rival Polycab India reported a drop in first-quarter profit while Havells India missed quarterly profit estimates on higher expenses.

Crompton Greaves Consumer Electricals is expected to report June-quarter results on Wednesday.

PEER COMPARISON

Valuation Estimates (next 12 Analysts' sentiment

(next 12 months)

months)

RIC PE EV/EBI Revenue Profit Mean # of Stock to Div

TDA growth (%) growth (%) rating* analyst price yield

s target** (%)

R R Kabel 44.42 29.65 19.09 36.64 Strong 10 0.91 0.34

Buy

Polycab India 46.07 32.17 18.00 18.92 Buy 24 0.95 0.46

Havells India 64.94 44.82 20.06 26.90 Buy 21 0.97 0.49

Crompton Greaves 44.20 29.41 12.20 30.91 Buy 31 1.03 0.68

Consumer Electricals

* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

* Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

APRIL-JUNE STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 83.6990 rupees

(Reporting by Dimpal Gulwani and Ashna Teresa Britto in Bengaluru)