MIDWESTLTD

Midwest Limited reported a consolidated revenue of INR 215 crores for Q4 FY26. For the full year FY26, consolidated revenue reached INR 645 crores, marking a 3% growth from INR 626 crores in FY25. The Q4 consolidated EBITDA margin improved to 27% from 23.7% sequentially, while the full-year EBITDA margin stood at 27.01%. Consolidated PAT margin for Q4 was 17.16%, and for the full year, it was 16.49%, a slight decline from 17.17% in FY25.

The granite segment demonstrated resilience, with standalone EBITDA margin at 27.55% and PAT margin at 17.47% for FY26. However, Q4 FY26 granite sales experienced a 5.3% YoY dip to INR 214 crores from INR 226 crores in Q4 FY25. This decline was primarily attributed to logistics issues and increased freight costs, which prevented the sale of approximately 3,000 CBM of production, potentially worth INR 25 crores in revenue. Management expects consistent granite revenue growth of 10-13% in the coming years.

The Quartz segment, which commenced production last year, faced initial technical glitches, resulting in over INR 6 crores in costs that negatively impacted PAT. Production has stabilized, with volumes expected to ramp up from 2,000 tonnes last month to 5,000 tonnes this month and a target of 10,000 tonnes next month. The company aims for 60% capacity utilization (150,000 tonnes) this year for Phase 1. Phase 2 of the Quartz plant, with a capex of INR 125-130 crores, is scheduled for completion by Q4 FY26, with contributions expected from Q1 FY27. The combined Quartz operations (Phase 1, Phase 2, and HPQ) are targeted to generate INR 400 crores in top line within the next three years.

Midwest Limited has been selected as a consortium partner by Kerala Minerals and Metals Limited (KMML) for a Rare Earths pilot plant, with a budget of INR 20 crores. This six-month project, starting in July, is a significant milestone as it marks the first private partnership in monazite Rare Earths processing. The company anticipates INR 200 crores in revenue from this project once commercialized. In Sri Lanka, the heavy mineral sands project is awaiting policy clarity from the government, expected by June, which could unlock INR 350-400 crores in revenue. The company is also developing High Purity Quartz (HPQ) and expects to be one of the few global producers, catering to semiconductor and solar industries.

To mitigate fuel cost pressures, Midwest Limited is aggressively pursuing green initiatives. The company has reduced its fossil fuel energy cost from 17-18% to 12-13% of total energy costs. They plan to convert another 10% to renewable sources this year, expanding their EV fleet and investing in captive solar. These efforts are expected to contain energy costs and improve margins, with a 4% price increase implemented to offset rising costs.

A new 30-year mining lease in Galaxy has commenced production and is already contributing to revenue. This specific site is targeted to contribute 10,000 to 12,000 CBM of production, which is expected to translate into INR 70-80 crores in revenue. The company benefits from cost advantages by sharing equipment with existing operations, minimizing additional capex.