Ashapura Minech.

Ashapura Minechem reported consolidated revenue from operations of INR960.4 crores for Q3 FY26, a modest 0.8% quarter-on-quarter growth. EBITDA for the quarter stood at INR143 crores, marking an 8.3% QoQ increase, with the EBITDA margin improving to 14.9% from 13.9% in Q2. Profit Before Tax (PBT) before exceptional item^📎s grew over 10% QoQ to INR89.31 crores, and basic EPS for the quarter was INR8.82. For the nine months of FY26, consolidated revenue reached INR3,268 crores (up 50% YoY), and EBITDA was INR463 crores (up 52% YoY).

Guinea operations were the primary revenue driver, contributing 76% to Q3 FY26 consolidated revenue. However, performance was slightly below expectations due to prolonged monsoons impacting operations and preventing the achievement of planned volumes. The bauxite market experienced a price drop attributed to the reopening of suspended leases in Guinea, uncertainty around the US-China long-term trade deal, and excess alumina supplies from new smelters outside China. Management expects bauxite prices to stabilize and gradually pick up post-Chinese New Year, with a perceived floor around $64-65/ton, and Guinea remaining a dominant global supplier.

The Indian operations contributed 24.2% to Q3 FY26 revenue and faced challenges from volatility in raw material costs and climatic changes. Despite these headwinds, the company is focused on improving profitability and sales through the addition of value-added products. Ashapura Minechem aims for significant growth in its Indian business over the next two to three years, leveraging a diverse product portfolio that caters to approximately 10 industries including paint, paper, edible oil, steel, and construction.

A significant factor in the Q3 FY26 EBITDA margin improvement was the reduction in demurrage charges and enhanced cost efficiency. The company has implemented new long-term tie-ups with mining and logistics contractors, including China Railway, and secured freight contracts on CQD (Customary Quick Despatch) terms, which eliminate demurrage. These initiatives have helped maintain a consistent shipping freight and are expected to drive Guinea operating costs below $60/ton for the next quarter, contributing to long-term cost sustainability.

Most of the capital expenditure in Guinea is largely complete, with an additional 20-25% expected over the next 1-1.5 years. India is also planning some capex, which is currently being finalized. Management believes the company's debt levels are currently near their peak. While there is an intention to gradually reduce debt, no further debt additions are anticipated in the near term, as internal accruals are expected to manage working capital needs as volumes grow.

Ashapura Minechem reiterated its confidence in achieving a long-term bauxite volume target of 15 million tons by FY27-28, projecting a linear growth from 3 million tons in the previous year. The company is optimistic about the sustained high demand for aluminum metal, driven by sectors like EV production, aerospace, and defense, projecting a 7% CAGR. With bauxite reserves estimated to last 50 years and ongoing cost structure improvements, the company is focused on long-term value creation rather than short-term quarterly fluctuations.