RHI Magnesita India Ltd. - Tough quarter; Price hikes to the rescue - Company Update
31 May 2026
Companies Updates
RHIM’s 4QFY26 performance was below our estimates due to weaker than expected offtake and higher than expected operating expenses, driven by elevated RM (Magnesia), high freight cost and INR depreciation. The market share gains in steel & iron making and new 4PRO contracts are sustainable and should aid growth in upcoming quarters. Traction in coke oven projects is likely to ensure revenue visibility in FY27E. Additionally, selective price hikes implemented in 1QFY27 and more expected in the ongoing quarter are expected to enhance value growth in FY27E. However, the loss of market share in cement segment, price cutting and cut-throat competition in steel segment due to massive overcapacity, is likely to impact profitability going ahead. This is the reason for the 10.8%/ 10.2% cut in FY27E/ FY28E estimates respectively. Further, we have downgraded our valuation multiple and now value RHIM at average of 15x Mar’28E EV/EBITDA (previously 17x) and 28x Mar’28E PER (previously 30x) to arrive at a TP of Rs 500/share (previously Rs 580). However, we maintain BUY rating due to sharp correction in share price (attractive valuations).
RHI Magnesita India Ltd. Stock Price Chart
Value growth offset weak offtake:
RHIM reported 2% yoy growth in consolidated revenues at Rs 9.3bn in 4QFY26 (miss to our estimates) impacted by a 6% yoy decline in offtake, more than offset by 8% jump in realization. Dispatches were weak due to weak demand and loss of market share in the cement business and high competition in steel business. For FY26, revenue grew by 9.4% yoy to Rs 40.2bn.
Weak margins due to input cost inflation:
RHIM reported a 66bps yoy; decline in consol. margins at 9.5% for 4QFY26, impacted by high Magnesia cost, elevated freight cost & INR depreciation leading to high operational expenses. This translated into 5% yoy decline in consol. EBITDA at Rs 882mn. Adj. PAT grew by 8% yoy to Rs 390mn (adjusted for impairment at Dalmia assets). For FY26, Adj. EBITDA declined by 6% yoy to Rs 4.5bn, translating into margins of 11.2%, -180bps yoy. Adj. PAT declined by 11% yoy to Rs 1.8bn.
Price hikes and market share gains to aid performance:
The market share gains in steel & iron making and new 4PRO contracts are sustainable and should aid growth in upcoming quarters. Traction in coke oven projects has improved substantially with new projects signed, ensuring solid revenue visibility for 18 months. Additionally, selective price hikes implemented in 1QFY27 and more expected in the ongoing quarter are expected to enhance value growth in FY27E. This, along with benefits of internal cost control, new product localization (tap hole clay) and recycling of RM, should result in cost savings. The release of working capital due to tighter inventory and lower receivables has led to a net cash balance sheet as of Mar’26, ensuring future capex through internal accruals. However, the loss of market share in cement segment, price cutting and cut-throat competition in steel segment due to massive overcapacity, is likely to impact profitability going ahead. This is the reason for the 10.8%/ 10.2% cut in FY27E/ FY28E estimates respectively.
Valuation and rating:
We value RHIM at average of 15x Mar’28E EV/EBITDA (previously 17x) and 28x Mar’28E PER (previously 30x) to arrive at a TP of Rs 500/share (previously Rs 580). The downgrade in valuation multiple is to account for the lower profitability (margins) outlook due to overcapacity in the industry. However, we maintain BUY rating due to sharp correction in share price (attractive valuations). Downward revision in TP is mainly due to cut in earnings and valuation multiple. Key risks: Over-capacity and price cutting in domestic market, poor demand from cement industry.
Company website: https://www.rhimagnesitaindia.com/
| Rating | BUY |
|---|---|
| CMP* | INR 406 |
| Target Price | INR 500 |
| Upside | 24% |
*CMP is as per report published date
Click to download the full RHI Magnesita India Ltd Q4FY26 Company Update
Analyst:
- Sahil Sanghvi - Research Analyst, Institutional Equities (NISM-201900004744)
- Uvais Khatri - Research Associate, Institutional Equities (NISM-202300049054)
FAQs on RHI Magnesita India Ltd Q4FY26 Company Update
These FAQs highlight key takeaways from MNCL’s institutional equity research on RHI Magnesita India, covering performance trends, growth drivers and risk factors relevant for long-term investors.
1. What impacted RHI Magnesita India's Q4FY26 performance?
The quarter was affected by weaker offtake, elevated magnesia costs, higher freight expenses, currency depreciation, and increased operating costs, resulting in lower-than-expected profitability.
2. What are the key growth drivers for RHI Magnesita India?
Key growth drivers include market share gains in steel and iron making, expansion of 4PRO contracts, traction in coke oven projects, selective price hikes, product localization, and recycling initiatives.
3. How are price hikes expected to support future performance?
Selective price increases implemented in FY27 are expected to improve realizations, support value growth, and partially offset rising input and logistics costs.
4. What industries contribute significantly to RHI Magnesita India's business?
The company primarily serves steel, cement, iron making, and industrial manufacturing sectors through its refractory products and technical solutions.
5. What are the key risks for the company?
Major risks include industry overcapacity, aggressive price competition, weaker demand from the cement sector, raw material cost inflation, and sustained margin pressure.
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Carysil Ltd: Crafting the future of modern kitchens - Company Update
We retain our BUY rating on Carysil Ltd with a revised target price of Rs 1,190 (earlier Rs 1,140), factoring in a rollover to Q3FY28E and a ~4% trim to FY27E–FY28E earnings. Strong traction in quartz and stainless-steel sinks, upcoming capacity ex...
Wonderla Holidays: Chennai Takes The Baton As Mature Parks Plateau - Company Update
We upgrade Wonderla Holidays to BUY from HOLD, as we revise earnings estimates upward by ~5% and roll forward our valuation to Q3FY28E. The company continued to deliver ARPU-led growth at mature parks during the quarter, while footfall growth remaine...
Rashi Peripherals Ltd: Stellar quarter - Company Update
We retain "BUY" rating and raise our target price to Rs. 610 (vs Rs 505 earlier). Rashi reported topline growth of 42.6% YoY in a seasonally weak quarter, on the back of strong sales volume & prices across PES segment (56% of revenue) and LIT (44...
Triveni Turbine: Worst likely behind, recovery pending - Company update
We upgrade our rating on Triveni Turbine to BUY, supported by improving execution visibility and a gradual recovery in order inflows. While new applications such as CO₂-based energy storage, MVR, and turbine servicing are likely to be incrementally...
The Anup Engineering: Through the Trough, Recovery in the offing - Company Update
We upgrade our rating on The Anup Engineering to BUY (previously HOLD) and revise our target price to Rs 2,515. The company is not yet out of the woods, with the market awaiting clear signs of a recovery in order inflows. That said, we believe the wo...
Saksoft Ltd: Temporary headwinds, normalization in sight - Company Update
We maintain our "BUY" rating with a revised target price of Rs 285 (vs 325). Saksoft delivered weak results – a) topline growth saw a de-growth of 3% despite the favourable currency mix, b) Top 2 clients have cut spends in Q3, the pain co...
Mayur Uniquoters: Riding export momentum - Company Update
We maintain our BUY rating on Mayur Uniquoters with a revised target price of Rs. 825 (earlier Rs. 770), as we roll forward our valuation to Q3 FY28E and upgrade our FY27E/FY28E earnings estimates by ~4%. The company delivered a robust operating perf...
Scoda Tubes Ltd.: Slight miss; structural thesis intact - Company Update
We retain BUY rating on Scoda Tubes but upward revise target price of Rs 250 (previously Rs 240). Increase in target price is mainly due to valuation rollover. Q3FY26 was a strong performance on offtake, marginally offset by pricing weakness and dela...
TD Power Systems: Global demand fuelling growth visibility - Company Update
We upgrade TD Power to BUY / revise our target price upwards to Rs 875 (vs. Rs 840 earlier). Q3-FY26 results were a tad lower than our expectations and reflect timing issues rather than demand or competitive weakness. Going ahead, the Tumkur facility...
SJS Enterprises Ltd - Premiumisation and Export-led Outperformance - Company Update
We revise our target price on SJS Enterprises upwards to Rs2,190 to account for an increase in revenue/ margin estimates, and valuation roll-forward to Dec’27E. SJS delivered another quarter of strong industry outperformance, with record profitabil...
Sundram Fasteners Ltd.: Exports spoil the show - Company Update
We lower target price to Rs 1035 (previously Rs 1085) and maintain Accumulate rating for Sundram Fasteners Ltd. (SFL). We downward revise our multiple to account for extended weakness on exports including delay in EV order to North America, in turn l...
ASK Automotive Ltd. - Firing on all cylinders - Company Update
We upgrade ASK Automotive to BUY rating on attractive valuation and increase our TP to Rs590 (Rs525 previously). The increase in TP is largely driven by valuation rollover. ASK delivered a strong Q3, materially ahead of our expectations, led by broad...
Kirloskar Ferrous Ind. - Casting and tubes outperform, spreads spoil the show | Company Update
We lower our target price to Rs 620 (previously Rs690) and retain BUY rating for Kirloskar Ferrous Industries Ltd. (KFIL). The decrease in TP is mainly to account for weak commodity spreads and realization across end products . KFIL’s 2QFY26 perfor...
IFGL Refractories Ltd. - Domestic focus continues to payoff; overseas improving gradually | Company Update
We decrease target price to Rs 280 (previously Rs 300) but maintain BUY rating. The change in TP is mainly due to cut of earnings estimates. IFGL delivered another quarter of strong standalone growth as its domestic-focused strategy continues to gain...
Borosil Ltd. - Glassware ignites growth; levers to power margins | Company Update
We reiterate our BUY on Borosil Ltd and revise our target price upwards to Rs. 460 (vs. Rs. 420 earlier), driven by strong demand momentum and emerging structural growth and margin levers. The company continues to deliver robust growth in its glasswa...
Venus Pipes & Tubes Ltd. - Export and welded drives confidence | Company Update
We increase Target Price to Rs 2040 (previously Rs1,950) and retain BUY for Venus Pipes & Tubes (VENUS) due to attractive valuations. Increase in TP is primarily due to valuation roll forward. Revenue in 2QFY26 was strong, supported by a sharp re...
ESAB India - Encouraging quarter; growth in focus | Company Update
We retain Buy on ESAB India with TP revised upwards to Rs 6,850 (vs Rs 6,554 earlier) on valuation rollover. The company delivered a strong quarter, with overall growth hinting at signs of recovery supported by margin gains. ESAB continues to o...
The Anup Engineering - All eyes on cash conversion | Company Update
We maintain our HOLD rating on Anup Engineering but increase TP to Rs 2,475 (vs Rs 2,375 earlier) considering steady operational performance and an unchanged growth outlook coupled with valuation rollover. The impact from higher taxes was anticipated...
Rashi Peripherals Ltd – Turns cashflow positive
We retain "BUY" rating with a Target Price of Rs. 505 (vs Rs 525 earlier). Rashi Peripherals ltd reported decent topline growth, on the back of strong sales from the PES segment (PCs, Desktops). Our dealer checks suggest demand is improving for AI-en...
Wonderla Holidays - Chennai on Track; Expansion Visibility Low | MNCL Research Update
We reiterate our HOLD rating on Wonderla Holidays Ltd while revising our target multiple downwards to 18x (from ~20x) and rolling forward our valuation to Q2FY28E. In a seasonally weak quarter, the company delivered a better-than-expected topline, pr...
R Systems International - Strong growth tempered by higher SG&A & RSU costs | MNCL Research Update
We maintain our "BUY" and retain our target price to Rs 620. R Systems delivered higher than expected topline growth (7.9% vs our estimate of 3.5% in INR terms). EBITDA was in line with our estimates / margins dipped 70bps QoQ on the back of higher R...
SJS Enterprises Ltd - Designed to outperform | MNCL Research Update
We revise our target price on SJS Enterprises upwards to Rs1,930 to account for an increase in revenue/ margin estimates, valuation roll-forward to Sept’27E and target multiple expansion. SJS delivered another quarter of strong industry outperforma...
Channel checks - Opalware and Glassware - Borosil Sets the Benchmark in Opalware Retail
We conducted channel checks across key markets in Western and Northern India to gauge demand trends (qualitative aspects) in the Opalware and Glassware categories. We also analysed balance sheet / profitability trends (quantitative parts) across key ...
Goldiam International - LGD Momentum builds; ORIGEM scaling | Company Update
We reiterate our BUY rating on Goldiam International with a target price of Rs. Rs.470. Despite near-term uncertainty around U.S. tariff implications, the company has delivered an exemplary performance driven by robust topline growth and increasing w...
ASK Automotive Ltd – Meets Expectations; ALPS & Aftermarket to Drive Growth | MNCL Research Company Update
We retain ACCUMULATE on ASK Automotive while lowering our target price to Rs 525. The lowering of TP follows downward revision in our revenue and margin estimates, partially offset by valuation rollover. ASK delivered a strong Q2, broadly in line wit...
Sundram Fasteners Ltd. - Steady Domestic Momentum Offsets Export Weakness; upgrade to Accumulate - Company Update
We increase target price to Rs 1085 (previously Rs1030) and upgrade our rating to Accumulate for Sundram Fasteners Ltd. (SFL) due to steep correction in share price. Increase in TP is mainly due to valuation roll forward. SFL’s performance in 2QFY2...
JNK India Ltd – End of Overhang, Execution to Drive Growth | Q2FY26
Our interaction with JNK India led to the following conclusions: JNK India’s legacy low-margin orders (NRL, IOCL) delayed by site and client issues are expected to conclude largely by Q2FY26, with minor spillover into Q3FY26. From Q3FY26, high-marg...
Ratnamani Metals and Tubes Ltd. - Subsidiaries outperform | Company Update
We increase target price to Rs 2710 (previously 2690) and upgrade to Accumulate rating. Increase in target price is due to valuation roll forward. In 2QFY26, the core pipes business saw modest growth as strong offtake was offset by weak realizations....
