RHI Magnesita

RHI Magnesita India Limited achieved its highest ever annual revenue, surpassing INR 4,000 crores for the first time, marking a 9% year-on-year growth. Shipments also grew by 5% to 523 kilotons. This growth was primarily fueled by strong performance in ladle solutions, electronic arc furnace projects, and the expanding iron making segment, including new coke oven and DRI projects. The company emphasized its role as a trusted partner, ensuring supply reliability amidst geopolitical disruptions.

Despite top-line growth, full year adjusted EBITDA margins moderated to 11.9% in FY26, down from 13.7% in FY25, reflecting challenging market conditions. Q4 FY26 revenue stood at INR 932 crores with adjusted EBITDA of INR 113 crores and margins of 12.1%. The company recognized a goodwill impairment in Q4 related to its Dalmia assets, driven by factors such as weaker export demand, currency volatility, increased competition, and inflationary pressures, though management confirmed no further restructuring is required.

The company demonstrated robust financial discipline, generating INR 409 crores in cash flow from operations, a 9% increase year-on-year. This strong cash generation, coupled with disciplined working capital management, resulted in a net cash positive balance sheet. The net debt-to-EBITDA ratio stood at a healthy 0.1x, positioning the company well to fund future growth initiatives internally.

For FY27, RHI Magnesita projects an EBITDA margin of 13% and anticipates outperforming market volume growth by 2%, targeting a 9% growth rate if the market grows 6-7%. This optimism is supported by planned price increases (1-3% effective May onwards), continued cost optimization, and the expansion of its 4PRO integrated solutions platform. The company plans a total capex of INR 150 crores for FY27, including INR 40-50 crores for maintenance and the remainder for 4PRO robotics and structural growth, all to be funded from its balance sheet.

The Dalmia assets demonstrated strong growth, with revenue increasing by 14% to INR 1,153 crores in FY26, though EBITDA margins slightly decreased to 10.8% from 11.5% in FY25. The cement segment faces intense competition and overcapacity. To counter this, RHI Magnesita is shifting towards a solution-oriented approach, aiming to be a strategic partner rather than just a supplier, and de-commoditizing the segment to regain desired profitability levels.

The company secured a significant 30,000 plus tonne coke oven project, providing a strong order book for the next 18 months. This project, combined with the transfer of mines to the company's name, is expected to improve fixed cost absorption and enhance margins due to lower raw material costs. Management also noted that rising raw material prices, particularly for magnesia, could be beneficial for the refractory industry if these costs can be effectively passed on to customers.