Mishra Dhatu Nigam Limited (MIDHANI)
Q1 FY26
Call date · August 18, 2025
1 · Management Commentary
Key Positives
- Turnover for Q1 FY26 at Rs. 170.5 crores, up 4.31% YoY.
- Value of production at Rs. 241.29 crores, up 14.47% YoY.
- EBITDA grew 32.86% YoY to Rs. 41.28 crores; EBITDA margin at 24.22%.
- Profit before tax at Rs. 19 crores (+112.5% YoY); PAT at Rs. 12.8 crores (+150.49% YoY).
- Robust order book of Rs. 1,827 crores as on July 1, 2025, providing strong revenue visibility.
- Strong position in strategic materials (super alloys, titanium, high-strength steels) and ongoing development of proprietary alloys.
Key Negatives
- Revenue growth remains subdued in single digits despite margin improvement.
- High dependence (75–80%) on imported raw materials, exposing the company to global supply chain risks.
- Ramp-up in new product segments (e.g., bulletproof jackets, additive manufacturing powders) is slower than anticipated.
Forward Guidance
- Capex plans: Ongoing investments in titanium processing (Rs. 50 crores) and powder manufacturing facility for additive manufacturing.
- New products/segments: Strategic alloy powders for AM, bulletproof jackets (Bhabha Kavach, ABHED), and advanced supercritical boiler alloys (740H).
- Expected client wins/losses: Anticipates significant orders from space, aero, missile, and export sectors in Q2; Rs. 701 crores of orders in advanced negotiation.
- Revenue/margin outlook: FY26 turnover target of at least Rs. 1,300 crores (aiming for Rs. 1,500 crores); EBITDA margin guidance of 23–25% for the year.
- Other strategic initiatives: Focus on platform-led innovation, global supply chain linkages, and long-term vision to reach Rs. 2,000 crores topline in 5 years.
2 · Q&A Highlights
Q 1 (Order Book & Revenue Visibility): What is the composition, execution timeline, and replenishment outlook for the order book?
A (Management):
• Order book at Rs. 1,827 crores (as of July 1, 2025); ~80% Defence, 20% space/energy/exports.
• Execution timeline is about 1.5 years; Rs. 701 crores of new orders expected in Q2.
• Exports currently Rs. 35 crores, mainly to 22 European countries.
Q 2 (Margins & Raw Material Costs): Are current margin levels sustainable, and how are raw material trends impacting profitability?
A (Management):
• EBITDA margin for Q1 at 24.22%; guidance for FY26 is 23–25%.
• Margin improvement driven by lower raw material costs, higher production, and efficient scrap utilization.
• 75–80% of raw materials are imported; supply chain disruptions remain a risk.
Q 3 (Capacity Utilization & Capex): What is the utilization of key facilities (Titanium mill, wide plate mill, Rohtak armor), and are there plans for further capacity expansion?
A (Management):
• Titanium mill fully utilized; Rs. 50 crores invested in new processing facility.
• Wide plate mill at ~40% utilization; focus on super alloys and titanium plates, with potential for aluminum rolling.
• Rohtak armor facility: Vehicle armoring has good orders; body armoring ramp-up slower, but new orders expected.
Q 4 (Product Portfolio Evolution & Innovation): How is MIDHANI evolving its product mix, especially in proprietary alloys, additive manufacturing, and exports?
A (Management):
• Portfolio includes ~500 alloy types, 100+ for aeronautics; strong in new alloy development.
• Powder manufacturing facility for AM underway; exports to 20+ countries.
• Transitioning to platform-led innovation as opportunities arise.
Q 5 (Long-term Vision & Strategic Challenges): What is the 3–5 year growth vision, and what are the main challenges?
A (Management):
• Targeting Rs. 2,000 crores topline in 5 years.
• Main challenge is dependence on imported raw materials; efforts ongoing to develop domestic sources and recycling.
Q 6 (Sectoral Opportunities): What is the outlook for Defence, aerospace, power, and MRO segments?
A (Management):
• Significant orders expected from Defence (HAL, LCH, etc.), space, and power (advanced supercritical alloys).
• In discussions with global aero engine makers; empaneled with some, expecting export orders soon.
• Bulletproof jacket segment (Bhabha Kavach, ABHED) expected to ramp up as certifications and orders materialize.
Q 7 (Seasonality & Execution): Is there seasonality in production or execution?
A (Management):
• Q4 typically sees higher production/execution due to project timelines; production is otherwise staggered based on product mix.
3 · Other Key Numbers
- Turnover Q1 FY26: Rs. 170.5 crores
- Value of production Q1 FY26: Rs. 241.29 crores
- EBITDA Q1 FY26: Rs. 41.28 crores
- Profit before tax Q1 FY26: Rs. 19 crores
- Profit after tax Q1 FY26: Rs. 12.8 crores
- Order book as on July 1, 2025: Rs. 1,827 crores
- Order book sectoral split: Aero Rs. 761 crores; Army Rs. 156 crores; Naval Rs. 420 crores; Exports Rs. 35 crores; ~80% Defence, 20% space/energy/others
- FY25 turnover: Rs. 1,074 crores
- FY26 turnover target: Rs. 1,300–1,500 crores
- Titanium processing facility capex: Rs. 50 crores
- Wide plate mill utilization: ~40%
- Number of export countries: 22
- Raw material import dependence: 75–80%
- Current orders with HAL: Rs. 750 crores
- Expected new orders in Q2 FY26: Rs. 701 crores
- Number of proprietary alloy grades: ~500 (100+ for aeronautics)
- Bulletproof jacket orders: Not disclosed (recent order from state police; ramp-up ongoing)
- Seasonality: Q4 typically higher execution; production otherwise staggered
All figures as stated in the call.