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Summary: Two cable makers in the same sector are spending their money in very different ways. One is building more of what already works. The other is betting its next leg of growth will come from somewhere else. Which bet pays off may depend on details the headline numbers don't show.
RR Kabel is investing heavily in cables for industrial, project and export customers. Finolex already earns healthy margins in electrical cables and is pushing into specialised products and optical fibre.
Start with the revenue mix
Finolex reported FY26 revenue of Rs 6,321 crore. Electrical cables contributed Rs 5,490 crore, or about 87 per cent. Communication cables added Rs 500 crore. Its copper-rods segment reported Rs 2,143 crore, but most was sold internally and eliminated on consolidation.
RR Kabel's structure is simpler. Wires and cables contributed Rs 8,764 crore, about 90 per cent of FY26 revenue of Rs 9,722 crore. Fast-moving electrical goods (FMEG), including fans, lights and switches, contributed the rest.
Fresh capital is going to different places.
RR Kabel is pushing harder into cables
RR Kabel's revenue rose from about Rs 5,600 crore in FY23 to Rs 9,700 crore in FY26. In Q1 FY27, wires-and-cables volumes grew 17 per cent, but cable volumes grew more than 25 per cent. Wire volumes rose about 12 per cent.
Cable plants were running at around 90 per cent utilisation, compared with 65-70 per cent for wires. This explains the Rs 1,200 crore Project RRise capital-expenditure plan, aimed mainly at cables. Management targets about 1.7 times capacity by FY28.
Wires-and-cables earnings before interest and tax (EBIT) margin improved from 7.4 per cent in FY25 to 8.9 per cent in FY26. Management targets about 10.5 per cent by FY28.
RR's plan is clear: add capacity, fill it and improve margins.
Finolex is changing the mix
Its electrical-cables segment earned a little over 10 per cent EBIT margin in FY26. Power-cable volumes grew 21 per cent in FY26, industrial flexible cables 17 per cent and automotive cables nearly 30 per cent. In Q1 FY27, electrical-cable revenue rose 47 per cent even though building-wire volumes grew only in the low single digits.
The bigger change is in communication cables.
Finolex is building an integrated optical-fibre operation. It has entered preforms, the glass rods used to make optical fibre, and is doubling fibre-drawing capacity from four million fibre-km to eight million.
The segment generated Rs 500 crore of revenue but only Rs 14 crore of profit in FY26. In Q1 FY27, revenue rose 62 per cent to Rs 176 crore and segment profit crossed Rs 50 crore. The near-30 per cent margin should not be extrapolated. It benefited from older, cheaper fibre inventory. Management expects margins to settle in the low double digits as that benefit fades.
Exports and FMEG add another contrast
RR Kabel gets about 26 per cent of revenue from exports. Finolex got only about 1 per cent in FY26, although Q1 FY27 exports of roughly Rs 50 crore almost matched the previous full year's Rs 55 crore.
RR's FMEG segment generated Rs 959 crore of FY26 revenue but remained loss-making. It reached operating breakeven in Q1 FY27. With roughly two-thirds of production outsourced, better margins here should need less capital than cable expansion.
What should investors watch?
RR Kabel's main risk is capital allocation. It is spending Rs 1,200 crore while competitors are also adding capacity. The test is whether new plants earn attractive returns once supply catches up.
Finolex's FY27 capital expenditure is about Rs 300 crore. Its challenge is whether optical fibre, exports and specialised cables become large enough to change earnings.
Cash flow also matters. Finolex generated only Rs 49 crore of operating cash flow in FY26 despite standalone profit after tax of Rs 623 crore, as working capital absorbed cash. Valuation needs care. Finolex owns 32.39 per cent of Finolex Industries, and its share of profits from associates and joint ventures was about Rs 205 crore in FY26. Its headline price-to-earnings (P/E) ratio therefore mixes operating earnings with associate income.
RR Kabel is betting on scale and better margins. Finolex is betting on product mix, optical fibre and specialised cables. That is the comparison investors should focus on.
Also read: Why is one Birla entry rattling India's cable makers?
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