IFGL Refractories Limited — Q3 FY26 earnings call

Call held 22 Feb 2026

Management summary

IFGL Refractories reported healthy revenue growth in Q3 FY26, with consolidated revenue up 23% YoY and standalone up 16% YoY, driven by strong performance in India and the US. However, margins were impacted by product mix, elevated employee costs, and increased business development expenses, leading to consolidated EBITDA margin of 5.3% and standalone of 7%. The company is progressing with its expansion projects in Khordha and Gujarat, and expects gradual margin improvement through cost optimization and strategic initiatives, despite ongoing profitability challenges in Europe, particularly with its Monocon UK business.

Highlights

  • Consolidated revenue grew by 23% YoY to INR 470 crores in Q3 FY26.

  • Standalone revenue increased by 16% YoY to INR 272 crores in Q3 FY26.

  • India-made and India-sold business grew by 25% YoY for 9M FY26, reaching INR 648 crores.

  • US operations revenue grew by 37% YoY in Q3 FY26, with improved profitability.

  • Europe revenue grew by 39% YoY in Q3 FY26, despite profitability challenges.

Concerns

  • Consolidated EBITDA margin was 5.3% in Q3 FY26 and 7.3% for 9M FY26, impacted by product mix, higher employee costs, and business development expenses.

  • Standalone EBITDA margin was 7% in Q3 FY26 and 11% for 9M FY26, below management's target of 12%.

  • Exceptional expense of INR 4.8 crores related to new labor code implementation in Q3 FY26.

  • Profitability in Europe remains under pressure due to higher operating costs, with Monocon UK business identified as a drag.

Key financials

  1. Consolidated Total Income ₹470 Cr +23%YoY
  2. Consolidated EBITDA ₹25 Cr +27%YoY
  3. Consolidated EBITDA Margin 5.3%
  4. Standalone Total Income ₹272 Cr +16%YoY
  5. Standalone EBITDA ₹17.8 Cr
  6. Standalone EBITDA Margin 7%
  7. Consolidated PAT (Adjusted) ₹1.7 Cr
  8. Standalone PAT (Adjusted) ₹1.3 Cr

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.

Segment breakdown

  • India Business (Standalone)
    17% Domestic Revenue Growth (Q3 FY26)25% Domestic Revenue Growth (9M FY26)₹648 Cr Domestic Revenue (9M FY26)78% Domestic Contribution to Standalone Revenue (9M FY26)13% Export Revenue Growth (Q3 FY26)₹62 Cr Export Revenue (Q3 FY26)-12% Export Revenue Growth (9M FY26)
  • US Operations
    37% Revenue Growth (Q3 FY26)
  • Europe Operations
    39% Revenue Growth (Q3 FY26)

Capital allocation

high confidence
  • Capex ₹350 Cr JV project is bifurcated into 50%-50% debt-equity
    • Khurda project (100% IFGL) ₹325 Cr
    • Gujarat JV project (51% IFGL, 49% Marvel) ₹300 Cr
    So see Sahil, I think we have already announced that we have two major capex in the pipeline. One is for the Khurda project, which will be around INR325 crores approximately, and it will be 100% IFGL project. And second is your JV project, which will be 51% IFGL and 49% Marvel, which will cost around INR300 crores. So this we need to bifurcate in 2 years' time. ... So that will be bifurcated. Let's say INR350 crores will be bifurcated into 2 years. Maybe 60% to 70% this year and balance next year. ... Because it is bifurcated into 50%-50% debt-equity.
  • Debt Gross ₹200.5 Cr
    With respect to liquidity position, we have a debt of INR 200.5 crores with a strong balance sheet.
  • M&A Marvel (Joint Venture) Joint venture · Pending regulatory · Consideration ₹[object Object] (mixed)

    Development of second facility in Gujarat

    Our second facility in Gujarat, being developed through a joint venture with Marvel, is also seeing a good development, even by government of India measures like the commencement of direct flight from China to India as well as the opening up of online business visa. So this will help us take the project from here on with better speed.
  • Liquidity Cash ₹123 Cr
    Cash and equivalents stood at INR 123 crores on a consolidated basis as on December 2025.

Guidance & targets

Headcount

  • Employee cost as % of revenue (standalone) Headcount · coming year · High confidence 10%
    Yes, it will be around 10% only for, coming year because as we know that we have,, these projects which are already on and the team is working and this will be around that percentage.

    — Arasu Shanmugam

Margin

  • EBITDA margin (standalone India business) Margin · High confidence 12% minimum
    standalone we have already said 12% minimum on that range.

    — Arasu Shanmugam

  • EBITDA margin (Khurda project) Margin · Medium confidence 19-20%
    For the revenue generated in Khurda. We are talking about that, whatever revenue, that particularly if you calculate a specific Khurda-based EBITDA margins level, that will be 8% to 9% higher than the average standalone Indian right now the, whatever we have, 11%.

    — Arasu Shanmugam

Capacity

  • Sheffield Refractories technology transfer completion Capacity · March 2026 · High confidence Completed

    Previously December → Completed

    The technology transfer to India is underway and is expected to be completed by March 2026.

    — James Leacock McIntosh

  • Khordha project completion Capacity · end of FY27-28 · High confidence Completed
    On the expansion front, our greenfield project at Khordha, Odisha has commenced and is progressing as planned with completion target by the end of the FY'27-28.

    — Arasu Shanmugam

  • Gujarat JV project completion Capacity · FY29 · High confidence Completed
    For FY '28 Khurda, we are targeting to close and FY'29 is the target for Marvel.

    — Amit Agarwal

What to watch in Q4 FY26

Employee cost as % of revenue (standalone)

coming year (FY27)
Current 7% (Q3 FY26), 11% (9M FY26)
Target Stabilize around 10%

Why it matters

Employee costs have been volatile and impacted margins; stabilization is key for profitability.

Yes, it will be around 10% only for, coming year because as we know that we have,, these projects which are already on and the team is working and this will be around that percentage.

Risks & concerns

  • Monocon UK business dragging down consolidated performance

    high

    The Monocon UK business is identified as the primary drag on the company's overall profitability, with efforts underway for improvement.

    Management actively working on overcoming losses

  • Volatile global steel industry and flat demand

    medium

    Global steel demand expected to remain broadly flat, with modest recovery in 2026, impacting the operating environment.

    Management acknowledged

  • Profitability pressure in Europe due to higher operating costs

    medium

    Despite 39% YoY revenue growth, profitability in Europe remains under pressure, with a goal to achieve breakeven next financial year.

    Management working towards operational improvements

  • Delay in Sheffield Refractories technology transfer

    low

    Technology transfer moved from December to March 2026 due to component supply and technology combination issues.

    Management explained reasons and provided revised timeline

  • Regulatory delays for Gujarat JV (PN3)

    low

    The JV faces delays related to 'Press Note number 3' requiring additional approval for technology transfer from bordering nations, but positive government signals are noted.

    Management identified specific issue, positive signals emerging

Q&A highlights

7 direct
Employee cost as a percentage of revenue and stabilization Direct
Yes, it will be around 10% only for, coming year because as we know that we have,, these projects which are already on and the team is working and this will be around that percentage.

Provides clarity on the expected future trajectory and stabilization point for employee costs, a key operating expense.

Asked by Sahil Sanghvi

Normalized sustainable EBITDA margin for standalone India business and consolidated entity Direct
Double-digit is definitely ensured. That's what we always do and maintain and that's our, thing. Yes, I mean plus-minus 0.5 point here and there, but it will never come down from double-digit. ... standalone we have already said 12% minimum on that range.

Reassures investors about the company's long-term margin expectations for its core India business, despite current pressures.

Asked by Mansi Shah

Capex plans and spending timeline for Khurda and Gujarat JV projects Partial
So that will be bifurcated. Let's say INR350 crores will be bifurcated into 2 years. Maybe 60% to 70% this year and balance next year. And Marvel will start after this regulatory approval. We have already acquired land, that is already spent. So we need to spend just 50% of 30% of investment. Because it is bifurcated into 50%-50% debt-equity.

Clarifies the immediate spending plan and funding structure for the significant expansion projects, providing financial visibility.

Asked by Sahil Sanghvi

Reasons for Q3 margin pressure despite better peer performance Direct
I think we have spoke about that. There are three things what has impacted our margin: one is the product mix, second is the increased employee cost, and third one is the operational overhead what we have increased in this quarter.

Directly addresses investor concerns about the company's margin underperformance relative to the sector, attributing it to specific internal factors.

Asked by Rajesh Majumdar

Delay in Sheffield Refractories technology transfer to India Direct
No, I mean we are expecting, because the delay was due to some of a key -- it's the technology combination of both material as well as application installation combined. And there was some delay on a key component supply which has affected fabrication of that particular unit. So we are now expecting this to be shipped in end March, April, so we will get it Q1, end of Q1 next year. So from there onwards our journey starts.

Explains the specific reasons for the delay in a key strategic technology transfer and provides a revised, more concrete timeline.

Asked by Hemkesh Khattar

Regulatory delays affecting the Gujarat JV project Direct
No, no, that's like actually a specific to this particular case is PN3, that Press Note number 3, which suggest the one layer additional approval required when we bring technology from the countries, sharing the border with our nation. So that is the thing which is now coming.

Clarifies the specific regulatory hurdle (PN3) impacting the Gujarat JV, which is a significant growth initiative.

Asked by Hemkesh Khattar

Monocon UK business dragging down consolidated performance Direct
The main area only in the company that we need to work on and we are working on very hard, is the Monocon business in the UK. And we feel sure that over the coming quarters, we will start to see improvements in those figures. I think when we see improvements in those figures it will have a massive effect on the company because that is the drag at the moment.

Identifies a specific underperforming segment (Monocon UK) as the primary drag on consolidated profitability and outlines management's focus on its turnaround.

Asked by Saket Kapoor

Contribution of flow control refractories to total portfolio Direct
Yes, I mean, it's close to let's say 50%-55% for flow control per se..

Provides insight into the company's product mix and the significant contribution of a key product category to its overall revenue.

Asked by Sanjay Nandi

2 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Overview

IFGL Refractories reported a healthy Q3 FY26, with consolidated revenue growing 23% year-on-year to INR 470 crores and standalone revenue increasing 16% to INR 272 crores. However, profitability was impacted by higher employee costs, related overheads, and changes in product mix, leading to a consolidated EBITDA margin of 5.3% and standalone of 7%. The quarter also included an exceptional expense of INR 4.8 crores due to the implementation of a new labor code.

Regional Business Performance

The India business continues to be a core growth driver, with domestic revenues growing 17% YoY in Q3 FY26 and 25% for 9M FY26, reaching INR 648 crores. US operations showed significant improvement, growing 37% YoY in Q3 FY26, with improved profitability. Europe saw 39% YoY revenue growth, but profitability remains under pressure due to higher operating costs, with management aiming for breakeven in the next financial year, particularly for the Monocon UK business.

Strategic Initiatives & Product Development

The company is making progress on product and technology fronts, including in-house tube changer refractories and snorkels that outperform industry benchmarks, delivering 85 to 119 heats at leading Indian steel plants. The SIB-HSD1 system for high-quality steelmaking environments was introduced. The Total Refractories Management (TRM) model is gaining acceptance, with 35-40% of monthly revenue now coming from this model, which is continuously expected to grow.

Expansion Projects and Joint Ventures

The greenfield project at Khordha, Odisha, is progressing with a completion target by end of FY27-28, with a total cost of approximately INR 325 crores. A second facility in Gujarat is being developed through a 51% IFGL and 49% Marvel joint venture, costing around INR 300 crores, targeting completion by FY29. Regulatory delays (PN3) for the JV, related to technology transfer from bordering nations, are being addressed, with positive signals from the government.

Management Transition

Mr. James Leacock McIntosh will step down as Managing Director on February 28, 2026, and as a Director on March 1, 2026. Mr. Mihir Prakash Bajoria has been appointed as the new Managing Director for a three-year term starting March 1, 2026. Mr. McIntosh will continue as a consultant for IFGL Worldwide Holdings Limited for three years to ensure a smooth transition.

Financial Outlook and Capital Allocation

Management expects employee costs to stabilize around 10% of revenue for the coming year and aims for a minimum 12% EBITDA margin for the standalone India business. The Khurda project is expected to yield EBITDA margins 8-9 percentage points higher than the current 11% standalone average. The company has a debt of INR 200.5 crores and cash and equivalents of INR 123 crores as of December 2025. Total capex spending of INR 350 crores is planned over the next two years for the Khordha and Gujarat projects, with the JV project funded 50-50 debt-equity.

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