RHI Magnesita Eyes Future Growth and Profitability Upswing

Ashwin Thakker

— 2 min read

Key Facts on Outlook:

  • Full-year volume growth projected at 8-9%.
  • EBITDA margins expected to improve sequentially in Q2 and Q3 FY'26, aiming for last full year's profitability.
  • Strategic price increases secured, with benefits anticipated in upcoming quarters.
  • High-cost raw material inventory (alumina) expected to be consumed by September.
  • Record capital expenditure of approximately INR 150 crores planned for FY'26, primarily for plant modernization.
  • Aspiration to achieve 25-30% market share in the iron-making segment within the next 2-3 years.

RHI Magnesita India Limited (RHIM) reported a resilient Q1 FY'26, demonstrating strength amid a competitive market. The company achieved 9% year-on-year revenue growth, fueled by a 13% increase in shipment volumes. Despite past input cost pressures, RHIM is signaling a clear path to enhanced profitability and sustained growth, driven by strategic initiatives and an improving cost environment.

Driving Volume and Market Share Growth

RHI Magnesita projects 8-9% full-year volume growth, driven by a strong order book and regained market share across segments. Strategic investments in iron making, including blast furnace and hot metal ladles, are progressing as planned, with a target of 25-30% market share in this segment within 2-3 years.

The company is evolving into a strategic solution partner with its '4 PRO business model,' integrating products, processes, and digital solutions. Chairman Parmod Sagar highlighted its differentiating power:

“will differentiate us from our competition.”

This strategy, featuring India’s first robotics solution in continuous casting, aims to secure long-term contracts and expand market share through high-value offerings.

Margin Recovery and Cost Efficiency

While Q1 FY'26 EBITDA margin was 10.8%, profitability was impacted by high raw material costs, particularly alumina from inventory. The outlook is positive, as these costs are tapering. CFO Azim Syed confirmed,

“By September, this high-cost inventory should be consumed.”

Expected sequential margin improvement in Q2 and Q3 aims for previous full year profitability. RHIM has secured price increases for future quarters. Cost optimization via recipe enhancements, circular economy practices, and energy efficiency programs are also in progress. Capital expenditure of approximately INR 150 crores in FY’26 focuses on plant modernization, targeting long-term double-digit ROIC.

RHI Magnesita India Limited is strategically poised for a period of growth and margin recovery. Through disciplined cost management, innovative solutions like the 4 PRO model, and targeted investments, the company aims to solidify its market leadership and deliver consistent long-term value. The focus on operational excellence and customer-centricity points to a resilient future.

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