Ashapura Minechem Limited — Q2 FY26 earnings call

Call held 21 Nov 2025

Management summary

Ashapura Minechem Limited reported robust financial performance for Q2 and H1 FY26, driven by strong bauxite exports from Guinea and stable growth in Indian verticals. The company achieved significant year-on-year growth in revenue, EBITDA, and PBT, supported by improved operational efficiencies and strategic initiatives. Key developments include the completion of a major bridge in Guinea to access new deposits, ongoing port capacity expansion, and the commencement of trial production for the iron ore business.

Highlights

  • Q2 FY26 Consolidated Revenue from operations stood at Rs. 952.5 crore, reflecting a growth of 57% year-on-year.

  • Q2 FY26 EBITDA doubled year-on-year to Rs. 132.1 crore, with a margin of 13.9% (up from 10.8% in Q2 FY25).

  • Q2 FY26 Profit Before Tax (PBT) grew over 128% year-on-year to Rs. 81.2 crore, achieving a margin of 8.5% (vs 5.9% in Q2 FY25).

  • H1 FY26 Consolidated Revenue reached Rs. 2,308 crore, a 75% year-on-year growth.

  • H1 FY26 EBITDA increased by 105% year-on-year to Rs. 319.9 crore, with a margin of 13.9% (vs 11.8% in H1 FY25).

  • Guinea bauxite exports in Q2 FY26 were 1.33 million tons, almost double the previous corresponding quarter.

  • Indian business showed over 25% growth in H1 FY26 compared to the previous year's first half.

  • New bentonite mines in Kutch started production, expected to distribute 300,000 tons annually.

Key financials

2 periods

Q2

  • Revenue
    ₹952.5 Cr
    YoY +57%
  • EBITDA
    ₹132.1 Cr
    YoY +102.6%
  • EBITDA Margin
    13.9%
  • PBT
    ₹81.2 Cr
    YoY +128%
  • PBT Margin
    8.5%
  • Basic EPS
    ₹10.11

H1

  • Revenue
    ₹2,308 Cr
    YoY +75%
  • EBITDA
    ₹319.9 Cr
    YoY +105%
  • EBITDA Margin
    13.9%
  • PBT
    ₹213 Cr
    YoY +112%
  • PBT Margin
    9.2%
  • Basic EPS
    ₹21.61

What they filed

Q1 FY27: revenue up 19.2%, net profit down 5.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue604 865 555 1,356 952 +58%960 +11%1,969 +255%1,616 +19%
EBITDA64 135 84 182 131 +105%114 −16%128 +52%181 −1%
Net profit43 108 79 114 106 +147%76 −30%121 +53%108 −5%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Capacity

  • Total handling capacity at BOFFA and GSM ports Capacity · by Q2 FY27 · High confidence 27 million metric tons

    Previously 16 million metric tons → 27 million metric tons

    Our BOFFA and GSM port expansion remains on track to complete by Q2 FY'27. And this will lift our total handling capacity at these ports from 16 million metric tons to 27 million metric tons, allowing us to serve both captive and third-party cargo more efficiently.

    — Manan Shah

Volume

  • Iron ore production volume Volume · FY27-28 · High confidence 15 million metric tons
    We would like to reiterate that we are confident of achieving our target of 15 million metric tons in FY'27-'28.

    — Manan Shah

  • New bentonite mines distribution Volume · annually · High confidence 300,000 tons
    We expect to distribute 300,000 tons annually, which will improve the cost structure and the sales potential for this vertical.

    — Manan Shah

Cost Reduction

  • Power cost reduction at bleaching clay plant Cost Reduction · High confidence 20%
    We foresee a minimum 20% reduction of the power cost at this plant from this initiative.

    — Manan Shah

R&D Spend

  • R&D cost as percentage of PAT R&D Spend · medium-term goal · Medium confidence 2%-3%
    But going forward, maybe we can reach 2%-3% of PAT, which we think is sufficient for the size of our Company and the kind of business we are in. I think 2%-3% could be a medium-term goal.

    — Manan Shah

Bauxite Prices

  • Bauxite price stability Bauxite Prices · going forward · Medium confidence stable or increase
    Our in-house view is that prices should be at least stable over here or may even increase a little bit from here. This is our view as on date. But mostly, we expect it to remain stable at the very least.

    — Manan Shah

Profitability

  • EBITDA per ton Profitability · Medium confidence improve
    we want to definitely improve our EBITDA from here.

    — Chetan Shah

Iron Ore Commercialization

  • Commercial quantities (volume) Iron Ore Commercialization · within a quarter or two quarters · Medium confidence at least 1 million tons a quarter or half million
    But max within two quarters, we should see some commercial quantities like at least like numbers, which would be at least close to like, say, a million tons or more within the next quarter or two.

    — Manan Shah

Risks & concerns

  • Monsoon season impact on mining business.

    medium

    Normally affects Q2 (July-September), but company made good planning and new initiatives to mitigate impact, resulting in 25% growth in Indian business.

    Management acknowledged

  • Logistics challenges (marine, barging, transhippers, ocean-going vessels, freight).

    medium

    Company entered into long-term arrangements with a world-recognized logistics company to overcome these issues for calendar year 2026.

    Management acknowledged

  • Country-specific risk in Guinea (political/regulatory stability).

    medium

    Management views Guinea as 'fairly stable and benign for businesses in the mining industry,' citing long-term multinational presence and government support for mineral exports (40% of GDP).

    Analyst downplayed

  • Bauxite price correction and stronger local currency.

    low

    Bauxite prices declined ~3% and local currency strengthened, causing a slight drop in EBITDA per metric ton from USD 9.3 to USD 8.9, but largely offset by improved operational efficiency.

    Management acknowledged

  • Volatility in quarterly numbers due to vessel timings and cut-off dates.

    low

    Acknowledged that quarterly numbers can fluctuate due to vessel departures and cut-off dates, but emphasized focus on long-term goals and improving EBITDA.

    Management acknowledged

Areas of evasion (2)

  • Detailed cost structure breakdown
  • Specific EBITDA per ton guidance

Q&A highlights

1 direct, 1 evasive
Detailed cost structure breakdown and correlation between bauxite prices and EBITDA. Partial
Currently, on this call, I will not be able to provide a detailed costing. However, most of our costs are related to the logistics, both road and sea logistics and transhipment logistics. So, most of our costs are actually built from logistics and mining is a smaller part of the cost.

Analysts are seeking granular unit economics, which management was unwilling/unable to provide, making it harder to model profitability drivers.

Asked by Parikshit Gujarati

Mitigation of country-specific risk in Guinea and diversification into other minerals/geographies. Direct
So, firstly, our perception of Guinea is that it is fairly stable and benign for businesses in the mining industry... I think that as a company, we do have a watch on other countries and mineral opportunities which they present. However, it would be too soon to comment on some kind of a specific plan.

Addresses a key investor concern about geographic concentration risk, with management acknowledging the watch on other opportunities but emphasizing current focus on Guinea.

Asked by Vardhman Sancheti

Guidance on increasing EBITDA per ton despite optimistic volume outlook, and underlying risks. Evasive
I think that, as the starting point for these discussions was a very clear committed target of 15 million tons. We do, however, refrain from giving quarterly guidance or guidance on EBITDA, even though we have mentioned that we think this is the lower end of the range at these prices and we expect operations to stabilize.

Management explicitly refrained from providing specific EBITDA/ton guidance despite strong volume targets, citing quarterly volatility and long-term focus, which could be a red flag for investors seeking clearer profitability outlook.

Asked by Sudarshan Mall

3 min read 6 chapters

Detailed narrative

Q2 & H1 FY26 Financial Performance Overview

Ashapura Minechem reported a strong Q2 FY26, with consolidated revenue from operations growing 57% year-on-year to Rs. 952.5 crore. EBITDA more than doubled to Rs. 132.1 crore, achieving a margin of 13.9%, up from 10.8% in Q2 FY25. Profit Before Tax (PBT) surged 128% to Rs. 81.2 crore, with a margin of 8.5%. For the first half of FY26, consolidated revenue reached Rs. 2,308 crore (up 75% YoY), and EBITDA was Rs. 319.9 crore (up 105% YoY), maintaining a 13.9% margin.

Guinea Bauxite Operations & Export Growth

The company's Guinea operations were a primary growth driver, with bauxite exports in Q2 FY26 reaching 1.33 million tons, nearly double the volume of the previous corresponding quarter. This growth was attributed to better planning, improved logistics arrangements, and maintaining good stock levels at the port. Management noted a slight correction in bauxite prices (approx. 3%) and a stronger local currency, leading to a minor dip in EBITDA per metric ton to USD 8.9 from USD 9.3 in Q1, largely offset by operational efficiencies.

Indian Business Verticals Performance

Ashapura's Indian business demonstrated robust performance, achieving over 25% growth in H1 FY26 compared to the previous year's first half, despite the monsoon season. All four verticals – Bentonite & Allied Minerals, Performance Minerals, Specialty Absorbent Solutions, and Advanced Ceramic Materials – delivered stable performance and improved realizations. The company commenced production in two new bentonite mines in Kutch, expected to distribute 300,000 tons annually, and aims for a minimum 20% reduction in power costs at its bleaching clay plant through a 9-megawatt solar plant.

Infrastructure Development & Capacity Expansion

To enhance connectivity and access larger bauxite deposits, Ashapura completed a significant bridge project (estimated over Rs. 80 crore investment) in Guinea, expected to open on November 27, 2025. This bridge, 100 meters long and 60 meters above ground, will provide access to high-quality bauxite from the BOFFA mining area. Furthermore, the company's BOFFA and GSM port expansion projects are on track for completion by Q2 FY27, which will increase total handling capacity from 16 million metric tons to 27 million metric tons.

Iron Ore Business Development

The company has initiated trial production for its iron ore business in Guinea, with commercialization expected within the next two quarters. Management is confident in achieving a target of 15 million metric tons of iron ore in FY27-28. While the iron ore business is expected to contribute meaningfully to the bottom line due to ex-mines transactions, its impact on the topline will be less significant compared to bauxite, which is primarily sold on a CIF basis. Initial commercial quantities are targeted at least 0.5-1 million tons per quarter within the next two quarters.

Strategic Outlook & Risk Management

Ashapura is focused on long-term growth, aiming for 15 million metric tons of bauxite volume by FY27-28, with plans to grow beyond this. The company views Guinea as a stable mining destination, supported by the government, and is actively tracking other mineral opportunities in Africa. While acknowledging quarterly volatility due to logistics, management emphasized building infrastructure and partnerships to sustain long-term volume and improve EBITDA.

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