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Midwest Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Midwest Limited reported a strong Q3 FY26, with consolidated revenue growing 10% YoY to INR 128 crores and EBITDA margin expanding to 23.7%. The company is actively expanding its granite operations with a new Black Galaxy mine and has commenced commercial production for Quartz Phase 1, with Phase 2 and High Purity Quartz development underway. Strategic investments in EV conversion for mining machinery and exploration of HMS opportunities in Sri Lanka and Sierra Leone underscore the company's long-term growth strategy.

Highlights

Consolidated Revenue for Q3 FY26 grew by 10% YoY to INR 128 crores.
Q3 FY26 EBITDA margin stood at 23.7%, up from 20% in Q3 FY25.
Nine-month FY26 EBITDA margin improved to 27% from 24.53% in the prior year.
INR 54 crores of IPO proceeds were used for loan repayment, improving the gearing ratio.
New 10.9-hectare Black Galaxy granite mine started production in Q3 FY26, offering favorable unit economics.
Quartz Phase 1 commercial production commenced, with Phase 2 work initiated for commissioning by Q3/Q4 FY27.
Sri Lanka HMS Phase 1 is projected to contribute INR 350-400 crores to the top line, with potential for INR 150-180 crores more from monazite oxides.
Total Quartz business (Phase 1, Phase 2, HPQ) is expected to generate INR 500-550 crores in top line.

Key financials

3 periods

Headline

Consolidated Revenue
₹128 Cr
YoY +10%
Loan Repayment from IPO
₹54 Cr
Long-term Borrowing
₹164 Cr
Cost of Debt
8%

Q3 FY26

EBITDA Margin
23.7%
PBT Margin
22%
PAT Margin
16.2%

9M FY26

EBITDA Margin
27%

What they filed

Q1 FY27: revenue up 35.2%, net profit up 29.2% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	141	117	230	142	159 +13%	129 +10%	216 −6%	192 +35%
Expenses	111	94	156	103	112	98	157	143
EBITDA	31	23	75	39	47 +52%	31 +35%	58 −23%	49 +26%
Margin	22%	20%	32%	27%	29%	24%	27%	25%
Other income	4	6	2	4	2	5	3	6
Interest	2	3	3	4	4	5	2	4
Depreciation	6	6	8	7	7	9	8	9
Profit before tax	27	20	66	33	38 +41%	22 +10%	51 −23%	42 +27%
Tax rate	42%	28%	26%	26%	26%	23%	27%	26%
Net profit	15	15	48	24	28 +87%	17 +13%	37 −23%	31 +29%
EPS	4.40	4.18	13.95	6.86	8.22	5.06	9.83	8.13

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

Production Capacity

HMS Phase 1 Output Production Capacity · Phase 1 · High confidence 150,000 tons

So, the HMS, we are looking at a Phase 1 capacity of 150,000 tons

— Ram Kollareddy

Revenue

Sri Lanka HMS Top Line (Phase 1) Revenue · Phase 1 · Medium confidence INR350 crores to INR400 crores

Sri Lanka will contribute to around INR350 crores to INR400 crores of top line in Phase 1.

— Ram Kollareddy
Monazite Oxides Top Line Revenue · once we start making oxides · Medium confidence INR150 crores to INR180 crores

add another INR150 crores to INR180 crores once we start making oxides.

— Ram Kollareddy
Total Sri Lanka HMS & Oxides Top Line Revenue · realistically · Medium confidence INR350 crores to INR600 crores

Sri Lanka can contribute anywhere between INR350 crores to INR600 crores realistically with these concessions that we have over over the Phase 1 and further validation into the oxides.

— Ram Kollareddy
Quartz Phase 1 Top Line Revenue · once up · High confidence INR200 crores plus, around INR200 core-INR210 core

Quartz Phase 1, it will be around INR200 crores plus, around INR200 core-INR210 core.

— Ram Kollareddy
Quartz Phase 2 Top Line (engineered stone and solar glass) Revenue · once up · Medium confidence around INR400 crores odd, plus or minus you can take 5%-10%

The Phase 2 will be similar number, let's say Phase 1 Phase 2 for engineered stone and solar glass will be around INR400 crores odd, plus or minus you can take 5%-10%.

— Ram Kollareddy
Total Quartz Business Top Line (Phase 1, Phase 2, HPQ) Revenue · tentative range · Medium confidence around INR500 core to INR550 crores

But overall you can look at the total size of this Phase 1 Phase 2 including HPQ close to around INR500 core to INR550 crores would be the tentative range on the top line.

— Ram Kollareddy

Capex

HMS Project Capex Capex · next two years · High confidence INR150 crores to INR160 crores

HMS will be close to INR150 crores to INR160 crores.

— Dilip Kumar Chalasani
Oxide to Magnet Plant Capex (1,200 tons/year) Capex · Medium confidence INR1,000 crores to INR1,100 crores

our internal study numbers show that at a capacity of 1,200 tons per year... the capex will be anywhere around INR1,000 crores to INR1,100 crores.

— Ram Kollareddy

Subsidy

Government of India Subsidy (Oxide to Magnet Plant) Subsidy · High confidence INR150 crores

And out of which the subsidy of Government of India is close to INR150 crores.

— Ram Kollareddy

Production

Production start from 10.9-hectare Black Galaxy mine Production · Q3 FY26 · High confidence as early as this quarter

we are expecting production numbers as early as this quarter from that specific mine

— Ram Kollareddy
Commissioning of Quartz Phase 2 Production · Q3 FY27 / Q4 FY27 · Medium confidence by end of Q3 or early Q4 next year

I think we are in line to commission the Phase 2 also maybe by end of Q3 or early Q4 next year.

— Ram Kollareddy

EV Conversion

Conversion of diesel trucks to electric EV Conversion · Q4 FY26 / Q1 FY27 · High confidence next one or two quarters

we will complete that as early as next one or two quarters

— Ram Kollareddy

Debt

Long-term borrowing Debt · right now · High confidence INR164 crores

Right now, it's about INR164 crores is the long-term borrowing.

— Dilip Kumar Chalasani

Risks & concerns

Delays in Sri Lanka HMS project due to government policy changes.
medium

Government policy changes caused a 'month or two' delay, but cabinet approval for new process is received, and management expects to accelerate.

Management acknowledged
Technological obsolescence and achieving world-class efficiency in new ventures (Rare Earth, Quartz).
medium

Management is concerned about fast-changing technology and achieving 90%+ efficiency (vs. current 86-87% in test work) to be world-class, despite geopolitical advantages.

Management acknowledged
Challenges in hiring and bolstering technical team outside China.
medium

Management states this has been a challenge but they are actively focused on it, hiring from competitors and leveraging listing visibility.

Management acknowledged

Q&A highlights

3 direct

Timelines for Rare Earth Initiatives and potential delays Direct

I think there could be delay of a month or two, but beyond that we don't see. But we can our plan is to make up as much time because the EPC contractor will be from China mostly.

Addresses potential delays in a key strategic project and management's plan to mitigate them, providing clarity on execution.

Asked by Akhilesh Kumar

Risks and challenges that keep management awake at night Direct

what keeps us awake in the night is, I think, we are trying to do things that have not been done by many companies, right, outside certain geography... flow sheets, the plans, the architecture... become redundant very fast in terms of technological change.

Reveals management's internal concerns about technological obsolescence and the challenge of achieving world-class efficiency in new ventures, despite external tailwinds.

Asked by Rushabh

Revenue contribution from the Quartz business (Phase 1, Phase 2, HPQ) Direct

overall you can look at the total size of this Phase 1 Phase 2 including HPQ close to around INR500 core to INR550 crores would be the tentative range on the top line.

Provides a clear, albeit tentative, financial projection for a significant new business vertical, crucial for future revenue growth.

Asked by Arvind

3 min read 8 chapters

Detailed narrative

Strong Q3 FY26 Performance & Granite Outlook

Midwest Limited reported a robust Q3 FY26, with consolidated revenue growing 10% year-on-year to INR 128 crores. The EBITDA margin for the quarter stood at 23.7%, an improvement from 20% in Q3 FY25. For the nine months of FY26, the EBITDA margin further improved to 27% from 24.53% in the previous year. The granite business is experiencing a 'very high growth trajectory' in the domestic market and 'high demand' from China, supported by a strong RMB (around 6.9).

Expansion in Granite Mining & EV Adoption

The company has commenced production from a new 10.9-hectare Black Galaxy mine in Q3 FY26, located adjacent to existing operations, which is expected to offer more favorable unit economics compared to current APMDC rates. Midwest is also aggressively pursuing EV conversion for its mining machinery, allocating a 'considerable portion' of IPO proceeds. They plan to convert their nine diesel trucks to electric within the 'next one or two quarters' and are prototyping the first electric excavator for future conversion.

Quartz Business: Commercialization & Expansion

Midwest has successfully ironed out challenges in its Quartz business and commenced commercial production for Phase 1. Work on Phase 2 has begun, with commissioning targeted for 'end of Q3 or early Q4 next year.' The company anticipates 'good volumes beyond what we planned' for the next year. The total Quartz business, encompassing Phase 1, Phase 2 (engineered stone and solar glass), and High Purity Quartz (HPQ), is projected to generate a top line of 'around INR500 core to INR550 crores.'

Strategic Entry into High Purity Quartz (HPQ)

The company has advanced its plans for High Purity Quartz (HPQ), initially slated for Phase 3, by integrating it into Phase 2 on a smaller scale with plans to ramp up in Phase 3. HPQ, starting at 99.9% purity, targets diverse applications beyond semiconductors, including optical glass, camera lenses, and solar crucibles. Management expressed confidence in addressing the semiconductor market, leveraging India's raw material availability.

Heavy Mineral Sands (HMS) Development in Sri Lanka

The Sri Lanka HMS project, despite a 'month or two' delay due to government policy changes, is now set to accelerate following cabinet approval for a new mining process. Phase 1 is planned for a capacity of '150,000 tons' and is expected to contribute 'around INR350 crores to INR400 crores' to the top line. Additionally, the company aims to produce monazite oxides, potentially adding 'another INR150 crores to INR180 crores' in revenue, with total Sri Lanka contributions ranging from 'INR350 crores to INR600 crores.'

Exploration of Rare Earth Forward Integration & Sierra Leone

Midwest is actively evaluating the Government of India's PLI scheme for permanent magnets, which could create significant domestic demand for rare earth oxides (2,000-2,500 tons needed for 6,000 tons of magnets, versus India's current 500 tons production). While a full oxide-to-magnet plant could cost 'INR1,000 crores to INR1,100 crores' with a 'INR150 crores' subsidy, the company will decide on forward integration based on the detailed PLI policy. Separately, Midwest is scouting for HMS concessions in Sierra Leone, aiming for a low-entry-cost model to develop assets within the 'next two years.'

IPO Proceeds Utilization and Debt Management

Out of the INR 250 crores raised from the IPO, approximately INR 225 crores were earmarked for non-IPO expenses. The company has already utilized INR 54 crores for loan repayment, which has improved its gearing ratio. An additional INR 27 crores are allocated for EV dump trucks, and the remaining funds are being deployed for the Quartz Phase 2 plant, with orders and advances being placed. Long-term borrowings currently stand at 'INR164 crores' with a cost of debt 'around 8%.'

Long-term Growth Vision & Management Challenges

Management expressed strong confidence in achieving 'double-digit volume growth' beyond 2030, driven by new verticals like Quartz and HMS. They acknowledge challenges such as rapidly evolving technology in new sectors and the difficulty of hiring and retaining technical talent outside China. However, they are actively bolstering their team, including hiring a Business Head for Quartz from Sibelco, and are devising an ESOP scheme to align incentives. The company's focus remains on achieving 'world-class' efficiencies and leveraging geopolitical shifts for supply chain diversification.

This is an AI-generated summary of a publicly available earnings call transcript.

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