R R Kabel Ltd (NSE: RRKABEL) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Mahendrakumar Kabra — Managing Director
Rajesh Jain — Chief Operating Officer
Analysts:
Unidentified Participant
Devansh Dedhia — Analyst
Natasha Jain — Analyst
Dhruv Jain — Analyst
Ashish Kanodia — Analyst
Achal Lohade — Analyst
Sandesh Shetty — Analyst
Vidit Trivedi — Analyst
Rahul Agarwal — Analyst
Karan Kamdar — Analyst
Balasubramaniam — Analyst
Rohit Charan — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to RR Cable Limited Q3FY26 earnings conference call hosted by MUFG end time. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Devansh Tedia from MUFG end time. Thank you. And over to you sir.
Devansh Dedhia — Analyst
Thank you. Good afternoon everyone and I extend a very warm welcome to all participants on the Q3 and 9 month FY26 earning conference call of RR Kabil Limited today. On this call we have Mr. Mahendra Kumar Kabra, Managing Director and Mr. Rajesh Jain, the Chief Operating Officer. Before we begin this call, I would like to give a short disclaimer. This call may contain some of the forward looking statements which are completely based upon our belief, opinion and expectation as of today. These statements are not a guarantee of our future performance and involve unforeseen risk and uncertainty.
With this, I hand over the call to Mahendra Kumar Kabraji. Over to you sir.
Mahendrakumar Kabra — Managing Director
Thank you. Good afternoon everyone and thank you for joining us today. For our Quarter 3 and 9 month FY26 results, I am joined by our CEO Mr. Rajesh Jain. The quarter under review played out macro environment that can best be described as one of the gradual stabilization. Globally, growth remains steady but uneven, saved by evolving trade dynamics and geopolitical uncertainties. While these factors continue to influence global supply chains, the broader environment shows signs of normalization rather than depression which helped restore a degree of productivity for businesses.
Against this backdrop, India continues to stand out. Supported by the strength of its domestic growth drivers. The economy has maintained momentum across consumption, investment and manufacturing, providing a solid foundation for sectors linked to infrastructure, housing and electrification. Increasingly, domestic consumption showed visible improvement during the period, supported by better household confidence and post tax income normalization which also reflected in stronger demand across construction linked categories. Financial conditions also turned more supportive during the period, easing inflation and monetary strength. Improved credit availability which is beginning to translate into higher economic activities across multiple sectors. These developments are particularly relevant for industries like ours that are closely aligned with long cycle infrastructure and urban development.
Against this improving macro backdrop, we are pleased with how the business performed at a consolidated level, we delivered our strongest ever nine month performance in terms of revenue, operating profitability and profit after tax. This was largely driven by the continuous strength of our wire and cable businesses and a disciplined approach to execution across the organization. The wires and cable segment saw strong momentum during the period. Growth was supported by healthy volume expansion across infrastructure, construction and power related applications along with the impact of commodity price movements. Better operating leverage, pricing discipline and tighter cost control helped improve segment performance.
In the FMG segment, conditions remain more challenging and broadly in line with industry trend. Demand in discretionary categories continue to be selective. That said, our focus remained on controlling costs, simplifying the portfolio and improving operating efficiencies. As a result, while losses persisted on a year on year basis, we were able to meaningfully reduce losses over the nine month period. Overall operating profitability improved during the period supported by the strong contribution from wireless and cable and better cost discipline across the business. This also translated into healthy improvement at the bottom line, reinforcing the operating usage in our model.
Looking ahead, while some near some unevenness may persist in certain segments, the longer term fundamentals for the electrical industry in India remain intact. Infrastructure development, housing growth, electrification and the ongoing shift towards organized and compliant products continue to support the demand. Our focus remains on disciplined exhibition, strengthening our core businesses and creating sustainable value over the long term. With that, I would like to hand over to Mr. Rajesh Jain to share further operational insights. Thank you everyone and have a good day.
Rajesh Jain — Chief Operating Officer
Thanks Mahendraji. From an operating standpoint, the environment during the period benefited from improving macro stability, particularly on the inflation and interest rate front. Inflationary pressures have moderated meaningfully and despite currency movement during the year, the impact on domestic cost structure has remained manageable. The supportive inflation environment enabled a more accommodative monetary stance with cumulative rate deductions, improving borrowing conditions across the economy, lower financing cost and beginning to support housing demand, infrastructure execution and working capital efficiency across the value chain sectors that are directly relevant to our industry. While volatility in copper and aluminum prices persisted during the period, improved pricing discipline across the industry and tighter procurement controls helped maintain stability.
Our focus remained on optimizing sourcing, strengthening supply chain efficiency and managing working capital. Reverently in this environment, RRCAppel delivered a strong operating performance during the quarter as well as over the nine month period. Starting with the consolidated performance, revenue from operations for Q3FY26 stood at rupees 2,536 crore representing 42.3% year on year growth compared to rupees 17.82crore Q3FY25. This growth was preliminary driven by strong momentum in the wires and cables business supported by healthy volume growth and improved realization mainly due to higher commodity prices. For the nine month FY26 consolidated revenue stood at Rs. 6,758 crore up by 25.1% year on year marking the highest ever nine month revenue for the company as compared to Rupees 5,400 crores in nine month FY25.
This growth reflects sustained demand across infrastructure and construction linked segments and disciplined contribution across the business. On the profitability front, EBITDA for Q3FY26 increased to rupees 206 crores and 86% year on year growth compared to rupees 111 crores in Q3FY25 EBITDA margins improved on the back of operating leverage, better cost absorption and and continued focus on procurement and execution efficiency despite volatility in raw material prices. For nine months FY26 EBITDA stood at rupees 526 crores up to 80% year on year as compared to rupees 292 crore in nine months FY25 once again representing the highest ever EBITDA for any nine month period.
Moving to the bottom line, profit after tax for Q3FY26 stood at rupees 118 crores registering a 72.4% year on year increase as compared to rupees 69 crores in Q3FY25. For nine months FY26 PAT came in at rupees 324 crores up 77.7% year on year marking the highest ever nine month PAT in the company’s history as compared to rupees 183 crore in nine months FY25. Coming to the segment performance, the wire and cable business continued to remain the primary growth engine for the company. Segment revenue grew by 48.6% year on year during Q3FY26 at rupees 2,293 crores as compared to rupees15.43 crore in Q3FY25 driven by a robust 30% overall volume growth led by stronger domestic demand alongside healthy export growth.
The company continues to enjoy a dominant position in the export market supported by scale, quality, certification and long standing customer relationships. Segment profitability also improved significantly with segment profit recording at 84.9% year on year growth at rupees 199 crore as compared to rupees 108 crores in Q3FY25. Turning to the FMH segment, revenue for Q3FY26 stood at rupees 243 crores compared to 240 crores in Q3FY25 reflecting a steady year on year performance broadly in line with industry trend amid continued caution in discretionary demand and channel level adjustments. From a profitability standpoint, losses remain largely restrained on a year on year basis and were significant significantly curtailed on year two year basis driven by focused cost reduction initiative, portfolio rationalization and improved operational efficiency supporting a gradual move towards a more sustainable profit trajectory.
Looking ahead, we remain cautiously optimistic about the outlook. While the near term continues may remain mixed in certain segments, the medium term fundamentals for the electrical industry in India remain strong. Infrastructure spending, housing growth and the structural shift towards organized, compliant and branded products continues to gather pace supported by rising awareness around safety standards and regulatory compliances. During the period the company incurred capital expenditure in line with its overall CapEx plan, supporting capacity and efficiency enhancement in line with robust industry demand and long term growth opportunities on manufacturing scale. Quality assurance processes and distribution reach position us well to benefit from this transition.
The company’s performance remains aligned with the objective of Project Rise on CA strategic roadmap and we remain firmly on track to achieve the stated milestones. We will remain focused on disciplined execution, operational excellence and strengthening our competitive position across the business. With this I would like I will request to open the floor for questions and answers.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchtone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press Star and one to ask a question. The first question is from the line of Natasha Jain from Select Capital. Please go ahead.
Natasha Jain
Yeah, thank you for the opportunity and congratulations team on a good set of numbers. So my first question would be broadly on the wires and cable demand on the ground. So if you could in a little detail color tell us how the demand is on the ground right now? How is the inventory position and because of copper rising so sharply is the channel seeing issues in terms of working capital? So that’s the first one.
Rajesh Jain
Thanks Natasha for your question. In Vyantable we have seen a very good growth in demand particularly due to rise in every sector be it real estate or industrial demand and even in export market also. Of course we have seen extraordinary volatility in last quarter and even it is continuing in this quarter also. And since prices have moved by almost 20 25% in just in single quarter quarter. So there were pressures on working capital at our channel side also we have seen. But at the same time we have seen a good. Since the demand is good and everyone is stocking up also.
So we have seen a good effect in Q3 of FY26 at the same time since this volatility is there and this is like a huge volatility what we have seen either in upper side also or in reducing side also. So this will be like managed as we keep doing in previous also that in leg manner this we will keep passing on this impact of prices to our consumer and customers.
Natasha Jain
Got it sir. Ideally how much time would it take for such a sharp price to be passed on to the channel and then to the consumer eventually or can there be any slowdown in projects especially in housing projects going forward in the near term.
Rajesh Jain
See one thing you need to appreciate that. See cable is like category C or cost C category item for any project wire and cable. Because what happens ultimately consumption will not be reduced just if prices are increasing or decreasing. For in a smaller time frame. If somebody is building a project, the wire and cable May cost around 1 to 1.5% of their total cost only. So demand will be there always. The only thing the stocking up by dealer may reduce or increase on smaller time frames.
Natasha Jain
Got it. And sir, one last question. So usually you’ve mentioned even previously in your con calls that the industry is set to see a 15% CAGR. So are we on track for that number even in calendar 26?
Rajesh Jain
Yes. If I talk about India growth as earlier also I said that this industry is expected to grow at double of the GDP growth. So if India grows at anything between 7 to 8% then this industry is expected to grow in 14 15% range. If we talk about us then of course with this 30% kind of volume growth in this quarter, we’ll able to achieve around 17 to 18% volume growth for nine month period. And this is in line with our business plan and growth strategy.
Natasha Jain
Got it. Thank you so much sir. I’ll fall back in the queue.
operator
Thank you. The next question is from the line of Dhruv Jain from Ambed Capital. Please go ahead.
Dhruv Jain
Thank you so much for the opportunity. So my first question is that if. You could just give us the data with respect to volume growth for this quarter and you know which segments have grown faster, you know wire segment, cable segment and even on the export side if you could just give us some color or just to understand numbers better.
Rajesh Jain
So our overall volume growth in wire and cable is around 30 plus percent where wire grew by almost 30% while cable grew more than 25%. And even if when we see domestic and exports in again in domestic we grew by in value more than 50% or even in volume more than 30% it was in domestic while in export it is about 25%. Overall we got volume growth by all segments be it wire or cable or domestic or export.
Dhruv Jain
I’ll just sir one clarification. So we’ve seen margins dip a little bit Q OQ while bio wide are significantly up. So is it that you’ve not passed. On the full impact of copper inflation? Is it because of that or is it because of some other factor?
Rajesh Jain
So if you see segment margin there is slightly reduced when you compare with previous quarter but as I said passing on the price is continuous process so and there will be some lag impact. So it is like continuously processed and as I said just a single quarter when rise was almost 25% still the impact on margins is hardly 0.5% so it is in line with or rather I would say better than industry what others have done.
Dhruv Jain
Just on capacity utilization and just CAPEX coming online. So if you could just give us an update on backfund on the cable side especially. So if I’m not wrong there was one more phase of capacity in cables that was going to come on stream in March. So just wanted to check if you are on track and if you could just give us the capacity utilization numbers across wires and cables. Thank you so much.
Rajesh Jain
So our CAPEX plan where we have planned to invest around 1,200 crore over a period of three years in which like almost 80% will be invested in cable side only. And we have planned this CAPEX in such a way that this will be able to service my demand growth of 18% volume growth what we have planned on a yearly basis. So in phase manner capacity will keep coming and will keep utilizing. Of course in if I see from capacity utilization point of view we are almost at 70% in wire side and 90% in cable side.
Dhruv Jain
So the one more I think one. More exclusion on the cable side in March.
Rajesh Jain
Right. So as I said this is like continuous process where we will keep increasing our capacity in fair manner. So like it is not one day overnight that I will full fledged double my capacity or something like that. So it will come, keep coming. And we are on track of our overall fixed assets and capitalization plan.
Dhruv Jain
Okay sir, thank you so much and all the best.
operator
Thank you. The next question is from the line of Ashish Kanodia from Citibank. Please go ahead.
Ashish Kanodia
Yeah, thank you. Sir, just on the price hike, if you can quantify, you know, how much of the price hike you were able to Pass on in 3Q. So for example, given how the, you know, copper prices has moved, assuming let’s say you wanted to take it need a 20% price hike, how much of it is has you passed on already in 3Q and if you have taken any incremental price hike in 4Q as well.
Rajesh Jain
So Ashish, this is continuous process and it is not like point to point, we can point out, but if you see like any increase, say by 2%, 3% or 4%, we need to keep changing our sales page also. So it was like continuous process. In the month of December itself we came with two new phases even in January in Q4 also since there were like upward movement in last week of December also. So there was like prices even in the 3 price rise in January also. So it is continuous process where you have to change your sales price based on movement in metal prices.
Ashish Kanodia
Sure sir. And just on the pricing behavior, if you, you know, look at all the top three, four players, including you, how is the pricing behavior like given, you know, typically if normally we have seen price hike only once a year. So now when you are taking once a month, now when you’re taking two or three price hike, is it like industry phenomena or are you seeing some player behaving very differently in terms of being aggress.
Rajesh Jain
At industry level? Almost this will remain the same practice because nobody can absorb this kind of price rises. Ultimately it will impact directly your profitability. So you have to keep changing the only so it is rather than time period, it is based on the degree of volatility. If prices are rising, say by 3%, 5% so you keep changing. So sometimes we have to change our pricing even within a week also by sometimes it will keep stable for two, three months also. So ultimately it will keep behaving like that only. And particularly in this type of volatility there will be frequent price changes.
Ashish Kanodia
Got it sir. And this last one, you know, January also has been pretty volatile. So if you can give some quantitative color in terms of how 1 the demand trend has been and also how the channel Inventory was at the end of January.
Rajesh Jain
Even in January also till like last day of January, the copper prices were on upward side also only. And we have seen a good demand in good demand also in market at the same time. See, you will appreciate as I earlier also I said this is like continuous consumption will always be there. The only thing there may be some like for a month or maybe for 15 days. There may be some stocking or destocking. But otherwise from you need to see in a larger time frame also. And from ultimate consumption point of view.
Ashish Kanodia
Sure, sir. And just last question. When I look at the payable days, it has increased this quarter. So anything to read into that?
Rajesh Jain
No, it’s like working capital management only and it is regular process of business where you can keep adjusting your payable days and receivable days. But if you see our overall working capital days remains in line with what we have projected at the beginning of the year.
Ashish Kanodia
Sure, sir. Thank you so much.
operator
Thank you. The next question is from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Achal Lohade
Yeah, good afternoon sir. Thank you for the opportunity. If you could clarify in terms of the margins, how do you see it playing out in fourth quarter assuming the prices remain stable at today’s level, do you see, you know, QOQ margin expansion or given the volatility, even fourth quarter margins could actually fall a little bit compared to 3Q.
Rajesh Jain
But as you said, if prices remain the same or volatility is like comparatively less, then there should not be any impact on margins. So in my sense it seems there will not be any impact and it may be like whatever. We had guidance in the beginning of the year where we want to project 100 basis improvement until Q3, we have done the same. So it will be in line with there where we have our yearly plan is considered.
Achal Lohade
So I’m just trying to, you know, extract number. So it was 9.9%. If you’re saying you can have a 100 basis point improvement, you are talking about 9.5% plus for the fourth quarter if prices were to remain stable from today onward. Have I understood right, sir?
Rajesh Jain
No, no. It will be very tough to predict exactly for quarterly numbers. But you have to see business as a in a longer frame where like when we are targeting around 8.5% on a yearly basis. So we’ll be in line in that line only.
Achal Lohade
Understood. The second question I had. And again, it’s theoretical. If copper prices were to fall back to $10,000 which where they were before this sharp increase, how would that impact us? You know, as an industry and also as a company, in terms of the volume and the margins? If you could give us some sense.
Rajesh Jain
So there are two aspects. One, of course there may be some impact because it is like psychological things. And if such kind of huge, say reduction in prices come, then there may be some pause in demand, not at consumption level, but at the stocking level. So we may see some slowdown, at least in terms of revenue. Because when you are assuming almost 25% further prices are going down, then there may be some impact. Nobody can neglect that. But at the same time, we have to see a business in little bit longer time frame where we are quite confident that based on the fundamental growth or plans, this industry will also grow.
And we have our own growth plans. And regarding margins also, as I said, okay, if theoretically we talk, then the lower the LME in the percentage terms, it may go up also. But at the same time, since there may be some inventory impact also. So there are so many aspects, there may not be any perfect guidelines for that.
Achal Lohade
Fair point. Another question I had, you know, in terms of the export, given the recent announcement of the EU trade deal, can you, can you give us some sense? Given our exposure is probably the highest among all players. How does it benefit? What extent the benefit could be?
Rajesh Jain
This announcement may take impact after maybe 12 months or so. But theoretically it seems a very good treaty. Where of course, since we are almost our 40% exports is to European Union. So we can get good traction. But even other way also we have our own good growth plan for export market. And as you can see, can see, even in last quarter also we have seen good growth. And it is like continuous process. Of course this treaty or this situation may impact for slower time. But overall, but particularly this TT announcement is quite favorable for our wire and cable business.
Achal Lohade
Understood. And just last question. If I miss our inventory with the channel, you know what is the typical inventory and what is it today according to you?
Rajesh Jain
I think normally they keep inventory of 25 to 30 days channel. And it might have increased by maybe another five to seven days. Because you will see that already this value Is increased by 20, 25%. So they also have some limitations in terms of how much investment they can make. So not that much increase. Inventory has not increased that much because in terms of value that might have increased. But at the same time, in terms of base, it is maybe increased by another five, seven days.
Achal Lohade
And maximum. What kind of inventory days have you seen like they can go up to in the Past.
Rajesh Jain
I don’t think at these levels anybody can increase but at maximum it can go by 45 days at max what I think because finance cost a lot in this business.
Achal Lohade
Fair point. Thank you and wish you all the best sir and fall back in the queue for any further question. Thank you.
operator
Thank you. The next question is from the line of Sandesh Shetty from HSBC bank. Please go ahead.
Sandesh Shetty
Hello Good afternoon sir. Am I audible? Yes please sir, what is the nine month CapEx that you have incurred for wires and cables business?
Rajesh Jain
Around 280 crores we have done in nine months.
Sandesh Shetty
And sir on FMEG now that the demand environment has also not been good in the last nine months how do you see the turnaround and when we can expect the profitability in this segment? What are you penciling in?
Rajesh Jain
Yeah of course this nine months we have seen like the season was not good particularly for fan also. And that is the reason that we are at a flat at for 9 month level also. But at the same time on profitability front what we have planned to achieve like profit, not profitability but green in EBIT levels in FMEG by this quarter which is Q4 of 26 and we are almost online because if you see Even in this Q3 where growth was like almost flat but still our losses are in the range of 5 crore only so.
So we are quite hopeful to achieve breakeven in this quarter.
Sandesh Shetty
And sir last question on exports there has been a good pickup in exports for you. Do you see this momentum continuing further and how is the mix in exports buyers versus cables?
Rajesh Jain
Yes, we have seen a very good traction in demand in exports. And it is not by one country but by all countries where we are exporting. And it will remain there because export was always our focus area. And in future also we are developing new geography as well as new product line also we are improving our and expanding our cable manufacturing capacity also. So till now our exports are also almost in the range of 7030 only. But now more growth will come from cable side only. Looking to our expansion plan, looking to our approval sales support also.
Sandesh Shetty
That’s it from my session. Thank you and all the best.
operator
Thank you. The next question is from the line of Vidit Trivedi from Asian Market Securities. Please go ahead.
Vidit Trivedi
Yeah. Hi sir. Thank you for the opportunity and congratulations on great set of numbers. I understand price hike in the domestic market is. You know you release a new price list and it is affected from that day I wanted to understand how do you account for the same in the exports order. Because as you have mentioned that 70% of exports are in the YS category. So how do you do that there.
Rajesh Jain
It is more easy because there we have 100% back to back mechanism like whatever my customer wants to buy either on monthly average or fortnightly average or weekly average. So we also book back to back. So there is no risk at all in terms of product profitability and it is maintained in that way.
Vidit Trivedi
Sir, on the EU trade deal, you know we almost do 40% of our sales to the European Union. My question is that you know what. Has changed for us? What was the duty structure pre EU trade deal and what is the expected duty structure post the deal? And how are the receivable cycles in the exports market?
Rajesh Jain
So if we talk about EU custom duty and everything then the rate of tariff was around 3.7% in EU for wire and cable which will become zero. Still the details are not that much clear when it will be effective. But ultimately it will be going to huge beneficial for wire and cable industry. And particularly since we already have established market. So you it will be more beneficial to us. And if we talk about receivables then our majority of the receivables are like secured by terms of LC and by the time it reaches we get the amount also.
So it’s some. It varies from 30 days to 60 days.
Vidit Trivedi
Got it. And so just last one, on the creditor days it has inched up to 42 days in December 25th. So is it more like improvement in the working capital driven by structure efficiency. Or is it more a function of. Extended supplier credit that may normalize in the later part.
Rajesh Jain
So it’s like balancing between my overall working capital when these prices were also increasing. So we developed few credit lines to have efficient control and uses of my working capital. So it will like keep changing as per the situation. But we have sufficient credit lines available to handle this business.
Vidit Trivedi
Should we assume that you know the overall working capital will be in the range of, you know, 50 to 60 days? Is it a fair understanding?
Rajesh Jain
Yes, that that’s what we target to remain in that line of 50 to 60 days only.
Vidit Trivedi
Thanks a lot sir. That’s all from my side. All the best.
operator
Thank you. The next question is from the line of Rahul Agarwal from Ikkikai Asset. Please go ahead.
Rahul Agarwal
Hi sir. Thank you for the opportunity. Good afternoon. First question to Mendozi. Sir, over the last year we’ve seen some senior management changes in the company. As of now it’s all done. And are there any pending gaps right now to be Filled. If you just talk about the senior management team at rrp. As you can see there is a good improvement in this financial year and team being the young and very dynamic and very aggressive in the working. We continue with this. Any gaps to be filled ahead or is it all done?
Mahendrakumar Kabra
No, it’s all done now.
Rahul Agarwal
Okay, perfect. Okay. Okay, got it. Second question was to Rajesh. When I’m looking at staff cost on a consolidated basis is looking like flattening out despite we going through decent amount of capex and expansion in the plant. I just wanted to understand how should we look at this? You know 400 crores odd annual staff cost. Is it going to be more because of automated plants, the hiring is lesser and hence incrementally going to be more inflation increase or there is some one off here?
Rajesh Jain
No. So this is like again a continuous process where you keep automation in the process and how we can best efficiency of not only of manpower but even at plant and machinery level also. So focus will remain there at the same time. Of course we have to meet whatever. There will be increased demand in manpower due to my capacity expansion. So it will be tough to figure out in terms of numbers. But it will like remain in line. Or rather it will improve in percentage terms only as our scale goes up.
Rahul Agarwal
Okay, got it. And is it possible to share the operating cash flow number for nine months?
Rajesh Jain
The absolute number that is not handy with me. But yes, the main thing that our working capital days are almost. You have seen it stable at 56 days only. And other than that like for nine months our capex is almost 260 to 280 cut. Also other things are within parameter only.
Rahul Agarwal
Got it sir. Just in terms of margins and growth rates in terms of. You know the outlook for exports over a medium term. I understand right now we’re going through a lot of growth because you know the environment outside is also great. Copper is seeing inflation. So pricing growth is higher. But where do you think the export growth should stabilize for us on a three year basis?
Rajesh Jain
Overall we are quite hopeful and that export will do much better. Looking to even at India level when you see the growth opportunities are many more there though temporary, there may be some impact due to this tariff unstability. But still like even we see quite hopeful that you US market will also open up for us. So there we have like solid growth fundamentals where like cable exports will also increase for Indian markets, Indian players.
Rahul Agarwal
Will it be higher than India growth over the next three years or it should be similar growth.
Rajesh Jain
It seems export can do much Better, at least for us we are quite hopeful, maybe a little bit better than the domestic growth but we are quite hopeful for all the markets, all product category.
Rahul Agarwal
Got it sir. And last question, on the margins I think nine months the margins have been, you know, extremely good on the, on the OPERATE console, EBITDA margins I’m talking about, I think with planning for 100 expansion we’ve got much more I think because of uplave and you know maybe there is some bit of inventory gains here as well. Just in terms of outlook for 27 and 28, should we budget like 8 to 8.5% in the same range or you think that we are running ahead of our guidance of 100 bits expansion every year.
Rajesh Jain
So we are planning to improve by another 100 basis points on every year. So like by FY28 we are targeting like double digit 10.5% kind of EBIT margins in our Y and cable business. So we are on track and it will remain in that range only.
Rahul Agarwal
Okay, good sir, thank you so much. All the best and congratulations. Pretty good set for the quarter. Thank you.
Rajesh Jain
Thank you.
operator
Thank you. The next question is from the line of Karan Kamdar from Choice Institutional Equities. Please go ahead sir.
Karan Kamdar
Hello. Thank you for the opportunity. Sir, what I wanted to know is what are. What is our strategy for increasing our B2B sales. I believe that is a large chunk and what is the split in the. Especially in the cables and wire segment. For B2B and B2C.
Rajesh Jain
So if you see till now about majority area where we since we started our journey from wire and still revenue is coming from 70% revenue is coming from wire side. It says that we are very strong in B2C category, B2C type of the business. At the same time if you see our capex plan even if you see industry trend where we know that almost 65% businesses contributed by cable segment and that is the reason that we have made a plan to have huge capex in B2B category and at the same time whatever capabilities we have built in B2B we will expand that capabilities.
We know there are so many areas particularly in power cable where like huge big contractors are there. We need to expand our B2B dealer network also. So we are working on that and we are in line so that we can achieve our these growth plans by making a good B2B sales side also.
Karan Kamdar
Okay sir, thank you sir, any plans?
Sandesh Shetty
What is our plan for the smug segment? What kind of career are you expecting over next three years and how big is the business that we are expecting.
Rajesh Jain
We are expecting to grow in smeg side at 25% since our base is small and we are since we are targeting to achieve breakeven at implementation bit level in this quarter itself. So it seems by FY28 we can achieve margins of EBIT margins in the range of 5 to 6% in FMG segment also.
Karan Kamdar
So one last question which I can. Squeeze in any plans to sort of start job work or something like that in the smeg space or do we only plan to do consumer?
Rajesh Jain
No, no, we are doing only consumer business. And see we have as per our plan right now we have one third in house facility and even third. Third we are doing outsourcing only. So there is no question of doing job work for others.
Karan Kamdar
Okay, thank you so much. Thank you.
operator
Thank you. The next question is from the line of Bala Subramaniam from Arihan Capital. Please go ahead.
Balasubramaniam
Good afternoon sir. Thank you so much for the opportunities. Sir, on that FMEG side how much percentage revenues comes from premium and mid premium side and if you go to breakdown like what percentage of revenue comes from premium and HPM and economy side and what are the SQLs planning to launch in coming quarters. What are the products and how much R and D they are trying to spend for FMEG side. And lastly we have strong presence into north and west and some presence into east and the south is still under penetrated. And like what is the plan to ramp up the south India presence and yes sir.
Rajesh Jain
Yeah thanks Bala. So if first if I see in FMG revenue by product category then almost 50% of revenue comes from fan side while 35%, 32% from lighting and rest, 18% from appliances and switch switch gears. And if we see from segment point from demonstration point of view almost like 20% revenue is coming from premium and mid premium category which is very healthy percentage even if you see at industry level. And that is the reason that we have seen good improvement or rather reduction in losses in this nine months also going forward also like as you said we are good in FMG business in north and east side.
But like since we have overall growth plan at India level so we will we are trying to establish a dealer distributor network in south also for FMG business.
Balasubramaniam
Okay sir. So on that FMEG distribution side what is the mix between dealers, retail chains and online like E commerce how the channel mixes right now are evolving.
Rajesh Jain
So in FMH business we are almost 10% we are getting from e commerce side while 90% is through dealer distributor only and environ cable. Of course it is 100% through dealer distributor only. And we have like if you see we have overall we have more than 6,000 design distributor all over India and more than almost one like 50,000 retail points. So we have reasonably good presence all over the country. The only thing wherever we do not have very strong presence there. We need to increase the depth of our sales and distribution.
Balasubramaniam
Got it sir. Thank you.
operator
Thank you. The next question is from the line of Dakshal Jain from White Oak Capital Asset Management. Please go ahead.
Unidentified Participant
Hello. Congratulations. A good set of numbers. I just wanted to confirm one thing. What is our cost of borrowing? I know we have little borrowing balance sheet. What is the cost of our borrowing?
Rajesh Jain
You are asking about cost of borrowing.
Unidentified Participant
Yes, yes.
Rajesh Jain
Yes. So it’s like around 7.7percent is our cost of borrowing. Because it is mix of my export loans and domestic freight facility. So it’s like in line or rather better than industry average.
Unidentified Participant
Okay.
operator
Thank you. The next question is from the line of Rohit Charan from I thought pms. Please go ahead.
Rohit Charan
Hello sir. So my question is like I’m new to understanding this industry so I just wanted to understand like the value chain, the supply chain of this entire industry. So in the entire supply chain like you supply to the distributor, they sell it to the dealer and then it goes to the retailer. How does it go? Like the distributor sells it directly to a. Let’s say a B2B like to the end real estate player or to a our company or how does it happen? Can you explain?
Rajesh Jain
So there are two line of business. One where it is B2C category where wire is sold through retailers. So there we have dealer or distributors who further sell to our retailers and they ultimately sell to end consumer. While in B2B category one we have bigger data distributor who sells to direct projects also. And sometimes even we directly sells to project customers like big industry or big government supplies also though right now our this mix of B2B is less than industry average because we are widely focused company so we have more distribution led business only. But it is like as per customer and as per business it keep changing.
Rohit Charan
Got it. Okay. And I saw, I got that answer. Thank you. Like there was a recent management hiring in the last two days I think so you put in the site exchange. So is there any intent behind like new senior hiring happening and reshuffling of some people towards the senior position? No.
Rajesh Jain
Earlier our MD also said that see there will be like growth plan and it is continuous process where we may keep hiring and as Per our strategy and to meet our growth plan there will be like regular. These are regular things, nothing special. Extraordinary.
Rohit Charan
And this last question. So copper prices they have been very volatile. So in the last one week it has crashed a lot. So I think you are told there’ll be some destocking risk probably which can happen to distributors. But is this volatile trend continues for another two or three quarters of going up and down the copper prices, aluminum prices, like how would it impact our margins? All that part.
Rajesh Jain
So as in earlier also I said it is almost impossible to predict the material prices and it may have some impact either side because if you ask before for three months nobody was expecting that 25% it can go up or maybe down also. So as I said, it is a continuous process of our business where you keep changing your selling pages based on your this material cost. So it is. There may be some impact if you see in very short term of one month or maybe one quarter. But ultimately since consumption will always be there.
So it is continuous process where you can keep changing yourself as a maintain your margin and protect your margins.
Rohit Charan
Got it. Just one last question. If I could slip it in like in the regional players, like in South India there is the orbit cables and invest. I think there are someone else listed players. So how are we planning to beat players in the regional spaces? Like once distributors normally they are kind of sticky to their brand. They choose right because they get better channel financing. So how do we plan to enter markets which already matured?
Rajesh Jain
Yeah, again this will be continuous process where every player, not only RR Kabil but every player would like to enhance their market presence through their ATL BTL activity or distribution expansion. And at the same time, you know, though there are many national players also but everybody, everybody has their own strong area or area of growth. And same for us also like we are very strong in few states while in other states we need to increase our market presence or growth share in that market also. So it again it will be like continuous process. While right now we are very strong in north and west part of the country.
While yet we need to expand our business in east and south also.
Rohit Charan
Okay, thank you so much.
Rajesh Jain
Okay, thank you.
operator
Thank you. Ladies and gentlemen, in the interest of time, this was the last question. I now hand the conference over to the management for closing comments.
Rajesh Jain
Thank you everyone for taking some time out of out to participate in this call. In case of any queries, reach out to us or our investor relationship agency MUFG Investor relations. We wish you all the best and hope to interact with you soon. Thank you so much.
operator
On behalf of MUFG Endtime. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.