IFGL Refractories Limited — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

IFGL Refractories reported its highest ever quarterly revenues in Q1 FY26, driven by strong domestic growth of 32% YoY. While global headwinds impacted overall profitability, leading to a 15% decline in standalone EBITDA and 26% in consolidated EBITDA, US and UK operations showed improvement. The company is progressing with significant capex for new greenfield projects in Khurda and Gujarat, alongside new product development and technology transfer initiatives to diversify its portfolio and strengthen market position.

Highlights

  • Highest ever quarterly revenues: Standalone INR 278 crores, Consolidated INR 457 crores.

  • Standalone revenues grew 14% YoY, Consolidated revenues grew 10% YoY.

  • Domestic business grew strongly by 32% YoY to INR 213 crores.

  • US operations (EI Ceramics) sales up 25% YoY with significant profitability improvement.

  • UK operations performing well, with technology transfer to India on track for Q3 FY26 completion.

  • New product development and sales channels (Australia subsidiary) showing positive results for Monocon.

Concerns

  • Standalone EBITDA declined 15% YoY to INR 37.7 crores, with margins at 13.5%.

  • Consolidated EBITDA declined 26% YoY to INR 39 crores, with margins at 8.5%.

  • Profitability impacted by higher raw material costs and increased employee costs.

  • Export business declined 22% YoY due to global economic slowdown and demand fluctuations.

  • German operations continue to face pressure from European economic slowdown in the foundry space.

Key financials

  1. Standalone Revenue ₹278 Cr +14%YoY
  2. Standalone EBITDA ₹37.7 Cr -15%YoY
  3. Standalone EBITDA Margin 13.5%
  4. Standalone PAT ₹14.7 Cr -33%YoY
  5. Consolidated Revenue ₹457 Cr +8%YoY
  6. Consolidated EBITDA ₹39 Cr -26%YoY
  7. Consolidated EBITDA Margin 8.5%
  8. Consolidated PAT ₹10.8 Cr -56%YoY

What they filed

Q1 FY27: revenue up 12.8%, net profit up 54.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue411 379 449 454 489 +19%469 +24%483 +8%512 +13%
EBITDA33 17 33 36 38 +15%23 +35%39 +18%37 +3%
Net profit12 -2 8 11 13 +8%-3 −50%14 +75%17 +55%
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.

Order book

low confidence

Composition

Mix 2 geographies
  • Domestic 77%
  • Export 23%

Share of order book by geography

Management noted traction in total refractory management offerings and new industrial orders for Monocon, but did not quantify the order book or inflow.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Greenfield project at Khurda, Odisha ₹300 Cr
    • Greenfield project in Gujarat (JV with Marvel) ₹300 Cr
    • 60 ton per day fully automatic, continuous tempering kiln for magnesia carbon production at Vizag unit
    On the capex front, our Greenfield project at Khurda, Odisha has been kicked off and is expected to be completed by the end of financial year '27-'28 with a project cost in the range of INR 300 crores to INR 350 crores. Our Gujarat Greenfield project, joint venture with Marvel, currently under regulatory approvals and is targeted for completion by the start of year of FY'29, with an estimated cost of around INR 300 crores. During the quarter we also inaugurated a 60 ton per day fully automatic, continuous tempering kiln for magnesia carbon production at our Vizag unit.
  • M&A Marvel (Gujarat Greenfield Project) Joint venture · Pending regulatory

    Focuses on nonferrous refractories primarily producing basic fired magnesite spinel bricks, basic fired magnesite bricks, fired magnesia chrome bricks and other basic bricks. This expansion will strengthen our product portfolio and open new growth opportunities.

    Our Gujarat Greenfield project, joint venture with Marvel, currently under regulatory approvals and is targeted for completion by the start of year of FY'29, with an estimated cost of around INR 300 crores.

Guidance & targets

Capex

  • Khurda Greenfield Project Completion Capex · FY27-28 · High confidence End of FY27-28
    On the capex front, our Greenfield project at Khurda, Odisha has been kicked off and is expected to be completed by the end of financial year '27-'28 with a project cost in the range of INR 300 crores to INR 350 crores.

    — Arasu Shanmugam

  • Gujarat Greenfield Project Completion Capex · FY29 · High confidence Start of FY29
    Our Gujarat Greenfield project, joint venture with Marvel, currently under regulatory approvals and is targeted for completion by the start of year of FY'29, with an estimated cost of around INR 300 crores.

    — Arasu Shanmugam

Technology Transfer

  • Sheffield Technology Transfer Completion Technology Transfer · Q3 FY26 · High confidence Q3 FY26
    Our technology transfer from Sheffield, another subsidiary, is progressing well and is expected to be completed by third quarter of this year.

    — Arasu Shanmugam

Profitability

  • Monocon Positive Figures Profitability · Next 3 quarters · Medium confidence Within next three quarters and beyond
    We believe that we will see positive figures within the next three quarters and then beyond, we will be in a position to grow our business and profitability.

    — James McIntosh

Revenue Growth

  • Standalone India Growth Revenue Growth · Next 2 years · High confidence 15-20%
    Got it. So, safe to assume that in the stand-alone, we can grow in excess of 15%, 20% for the next 2 years, even without any incremental capex? Correct.

    — James McIntosh

Tax Rate

  • Effective Tax Rate Tax Rate · Ongoing · High confidence 25%
    No. It is 25%. Effective tax rate is 25%.

    — Amit Agarwal

Market context

  • Consolidated EBITDA Margin Profitability · Ongoing · Medium confidence Double-digit
    I think we still look at double-digit margin profile at console level.

    — Amit Agarwal

What to watch in Q2 FY26

Raw material price stabilization

Next quarter (Q2 FY26)
Current Showing signs of stabilization
Target Continued stabilization without further increases

Why it matters

Crucial for gross margin improvement and overall profitability.

Profitability was lower compared to the last year, primarily due to higher raw material costs which are now showing a sign of stabilization... So, it is actually now, let us say, instead of earlier we used to see continuous increase. Now, wherever it has reached, it is stabilized there. No much trend of an increase we are foreseeing right now.

Risks & concerns

  • Higher raw material costs

    high

    Primary reason for lower profitability compared to last year, though now showing signs of stabilization.

    Management acknowledged

  • Global headwinds and economic slowdown

    medium

    Amid well reported global headwinds, India continues to outperform, but export business declined 22%.

    Management acknowledged

  • Increased employee costs

    medium

    Following organizational changes and investment in human resources, contributing to lower profitability.

    Management acknowledged

  • European economic slowdown impacting German operations

    medium

    German operations continue to face pressure in the foundry space, actively exploring alternative applications.

    Management acknowledged

Q&A highlights

7 direct
Raw material cost escalation and stabilization Direct
So, it is actually now, let us say, instead of earlier we used to see continuous increase. Now, wherever it has reached, it is stabilized there. No much trend of an increase we are foreseeing right now.

Addresses a key concern regarding margin pressure and provides an outlook on raw material price trends.

Asked by Lakshmi Narayanan KG

Strategy for market share gain in domestic market Direct
No, no. Our Managing Director has mentioned, it is our strategy. And competition will we also have the same feeling. So other competitors are cutting, but in spite of that, we have our strategy of increasing market share. So it's not what you mentioned, what the other competition mentioned is incorrect. And it is basically because of our different strategy, which also I would say that we won't elaborate much on that. But you ignore what they have said.

Clarifies that market share gains are driven by strategy and product performance, not aggressive pricing, countering competitor claims.

Asked by Harsh K Shah

Growth levers for standalone India operations in the next 2 years without new capex Direct
No because next 2 years as I was mentioning we are going to considerably grow in our non ferrous business, alumina plant which is already running from Gujarat till the time our basic plant is getting ready. On the other side like what our MD mentioned just now leveraging the research and other thing how we are going to improve our product and performance so that we gain more market share.

Explains the drivers for continued domestic growth, including non-ferrous business expansion and product performance improvements, even before new large capex projects contribute.

Asked by Harsh K Shah

Sustainability of improved US operations (EI Ceramic) performance Direct
In the United States, there has been very much, very positive change in sentiment since we see a very much more buoyant market as a result. If you were to look at the United States back in the last term of President Trump, it was very positive for the steel industry, very positive for the steel industry because obviously, when you have tariff protection against low-priced products coming from other countries, that enables the domestic manufacturers to really focus on developing, and there is tremendous investment in the Group and various other groups.

Provides context for the strong recovery in US operations, attributing it to positive sentiment in the steel industry and tariff protections.

Asked by Sahil Sanghvi

Ramp-up of new products (Magnesia Carbon Bricks and Casting Flux) Direct
We do see a very good ramp-up rate, like for example, we expect sizable share there we are expecting in another four, five months we may reach a very good level in Magnesia Carbon. Magnesia Carbon traction is very good and I know our performances wherever we supply are definitely very, very encouraging, compared to the existing vendor.

Gives an update on the progress and market acceptance of new strategic products, indicating strong traction for Magnesia Carbon.

Asked by Sahil Sanghvi

Regulatory approval for IFGL Marvel JV and project timeline Partial
So, Marvel JV IFGL, the regulatory means what you know, we already acquired the land and in Gujarat there are steps, you know converting agricultural into non-agricultural and then from non-agricultural to you know industrial use. So that processes are all moving and other regulatory is in that line. It is moving but parallel. Yes. So, I think as of now, we are targeting FY '28, where we will see the contribution from the basic bricks in this JV.

Clarifies the status of regulatory approvals for the Gujarat JV and provides a revised timeline for its contribution, indicating a slight delay from the initial FY29 target to FY28 for contribution.

Asked by Mayank Bhandari

Future growth expectations for Sheffield operations Direct
As far as growth in the future is concerned, as Arasu mentioned earlier, there are a number of projects which Sheffield specifically are working on with IFGL India to bring new technology to India, especially on the iron making side and also on the non-ferrous industrial side of the business, which is new for us. That will be a positive for them and also we have maybe restructuring of our Monocon operation. We are creating sales outlets and organizations which will not only benefit Monocon, but also seek to help the Sheffield operation to grow its business and other market areas that they have not been so far. So, we see a very positive future for Sheffield for sure.

Outlines the strategic initiatives and technology transfer plans that are expected to drive future growth and profitability for the Sheffield unit.

Asked by Mayank Bhandari

Gross margin improvement and high-cost inventory consumption Direct
I think inventory. Maybe, see, it has to be seen like this that what Arasu has mentioned that, what we see that we have almost seen this peak of input cost and we do not foresee much of increase in input cost in future, that major input cost increase. So, maybe by this quarter we will be consuming all our high-inventory cost or something like that. So, basically, from Q3, we should ideally see improvement in gross margins if things remain the same as it is now? Maybe yes.

Provides an expectation for gross margin improvement from Q3 FY26, linked to the consumption of high-cost inventory and stabilization of raw material prices.

Asked by Harsh K Shah

2 min read 5 chapters

Detailed narrative

Strong Domestic Performance Amidst Global Headwinds

IFGL Refractories achieved its highest ever quarterly revenues in Q1 FY26, with standalone revenues growing 14% YoY to INR 278 crores and consolidated revenues rising 10% YoY to INR 457 crores. This growth was primarily driven by a robust 32% YoY increase in the domestic business, reaching INR 213 crores, reflecting the success of the 'India made, India sold' strategy. India's steel industry recorded a 6.3% growth year-to-date, providing a favorable environment for domestic expansion.

Profitability Pressures from Costs and Export Decline

Despite strong revenue growth, profitability was impacted by higher raw material costs and increased employee expenses. Standalone EBITDA declined 15% YoY to INR 37.7 crores, with margins at 13.5%, while consolidated EBITDA fell 26% YoY to INR 39 crores, resulting in an 8.5% margin. The export business also saw a 22% decline, contributing to the overall margin pressure, though raw material costs are now showing signs of stabilization.

Strategic Global Operations Update

The company's US operations (EI Ceramics) showed significant improvement, with sales up 25% YoY and substantial profitability gains, benefiting from positive sentiment and tariff protections in the US steel industry. UK operations are performing well, with technology transfer to India on track for completion by Q3 FY26. However, German operations continue to face pressure due to the ongoing European economic slowdown in the foundry sector, prompting exploration of alternative applications.

Significant Capex for Future Growth

IFGL is undertaking substantial capital expenditure to fuel future growth. The Greenfield project at Khurda, Odisha, with an estimated cost of INR 300-350 crores, is expected to be completed by FY27-28. Additionally, a joint venture Greenfield project with Marvel in Gujarat, costing around INR 300 crores, is targeted for completion by FY29, focusing on non-ferrous refractories. The company also inaugurated a 60 ton per day fully automatic, continuous tempering kiln at its Vizag unit to enhance magnesia carbon brick production.

Product Development and Market Share Expansion

New product development and sales channels are yielding positive results. The company has opened a wholly-owned subsidiary in Australia to capitalize on growth opportunities. New products like Magnesia Carbon Bricks are seeing a good ramp-up rate, with expectations of achieving a sizable market share within 4-5 months. The total refractory management offering is gaining traction, and the company is actively engaging with steel plants to expand its market presence.

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