Mid-cap stock R R Kabel gains almost 20% in two trading sessions: 3 reasons why HSBC expects 15% more upside

Stock Market Today: Mid-cap stock R R Kabel has gained 20% in two trading sessions following the announcement of its March quarter results after market hours on Friday. Global brokerage HSBC believes the stock has more room for growth, and projects another 15% upside in RR Kabel's shares.

R R Kabel share price movement

Mid-cap stock R R Kabel touched an intraday high of ₹1,267.50 on the NSE today, which means gains of more than 20% over Friday's closing price of ₹1,015. While R R Kabel share price has witnessed some profit taking and is now trading close to ₹1,205 levels, it still means gains of close to 19%.

R R Kabel shares: 3 reasons why HSBC expects another 15% upside

For mid-cap stock R R Kabel shares, HSBC has given a target price of ₹1400 post Q4 results, which means gains of more than 15% from hereon.

HSBC revised its target price by 11%, driven by a 4-5% higher FY26-27 Ebitda estimates, valuation roll-over from March 2025 to June 2025, and lower working capital days assumptions. Their target price implies a FY27 estimated price-to-earnings multiple of 29 times

1) Strong Q4 Results performance: HSBC said that R R Kabel’s revenue, earnings before interest, tax, depreciation and amortisation (EBITDA) and net profit grew by 26%, 69% and 64% YoY, respectively, and were materially above HSBC's estimates and consensus.

2) Medium-term expansion strategy: Mid -cap stock R R Kabel has announced its medium-term strategic plan to increase EBITDA by 2.5 times over FY25-28, with 19% growth in revenue (18% cable & 2ires and 25% in Fast Moving Electrical Goods) and a sharp margin improvement ( about 300 basis point), highlighted HSBC.

3) On profit growth trajectory: HSBC has said that Q4 results improve their confidence that R R Kabel has returned to a strong and sector-leading profit growth trajectory.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.