Motilal Oswal Recommends RR Kable and KFin Technologies as Top Stocks to Buy

RR Kable RRKABEL delivered a strong 1QFY27 performance, with revenue growing 54% YoY to INR31.7 billion (12% beat) and EBITDA nearly doubling to INR2.8 billion (10% beat), driven by robust C&W volume growth and healthy execution in the FMEG segment. The C&W segment delivered ~17% YoY volume growth, outperforming the industry’s estimated 10–12%, while margin expansion was supported by operating leverage, better product mix, cost optimization, and improved fixed-cost absorption. Management reiterated confidence in achieving 10.5% C&W margins by FY28 and sustainable FMEG break-even in FY27.We raise our EPS estimates by 8%/6% for FY27-28 due to higher volume growth estimates and improving profitability in FMEG and expect strong FY26–28 revenue/EBITDA/PAT CAGR of 25%/36%/40%.

KFin Technologies KFin Technologies reported a steady 1QFY27 performance with operating revenue rising 30% YoY, driven by 182% YoY growth in international solutions following Ascent acquisition, while domestic MF & issuer solutions revenues grew 7% YoY and 8% YoY. Despite higher integration-related costs, the company delivered 7% YoY EBITDA growth with a healthy 34.2% EBITDA margin, while PAT of INR752m came in 7% above estimates due to better operating efficiency. Management has guided for 18–20% revenue growth in FY27, supported by cost optimization initiatives & a robust pipeline across businesses. We expect revenue/EBITDA/PAT CAGR of 22%/22%/18% over FY26–28E, supported by continued momentum in the domestic mutual fund business, a strong issuer solutions pipeline and gradual margin improvement in the international business. We upgrade the stock to BUY as improving profitability and margin expansion are expected to drive earnings growth.