RHI Magnesita India Limited () reported a strong performance in Q4 2026, achieving a revenue milestone by surpassing INR 4,000 crores for the first time in its history. Despite facing industry-wide challenges, the company demonstrated resilience with a 9% increase in revenue year-over-year. The stock price, however, showed a decline, dropping 1.88% to close at INR 414.4, reflecting investor concerns over margin pressures and competitive dynamics. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value assessment, suggesting potential upside for long-term investors.
Key Takeaways
- RHI Magnesita India reported a 9% YoY revenue increase to INR 4,000 crores.
- The company’s EBITDA margin contracted by 180 basis points to 11.9%.
- Stock price decreased by 1.88% amid concerns over margin compression.
- Strategic initiatives like the 4PRO platform are driving long-term growth.
Company Performance
RHI Magnesita India showcased robust growth in FY 2026, achieving a 9% increase in revenue compared to FY 2025. This growth was primarily driven by strong demand in the steel segment and increased shipment volumes. Despite a challenging environment with intense competition and cost inflation, the company maintained its leadership position in the refractory industry.
Financial Highlights
- Revenue: INR 4,000 crores, up 9% YoY
- Adjusted EBITDA: INR 477 crores, down from INR 503 crores in FY 2025
- EBITDA Margin: 11.9%, down from 13.7% in FY 2025
- Adjusted Profit After Tax: INR 180 crores, down 10% YoY
- Operating Cash Flow: INR 409 crores, up 9% YoY
Outlook & Guidance
RHI Magnesita India is focusing on strategic de-commoditization through its 4PRO platform, which integrates automation, digital monitoring, and sustainability initiatives. The company aims to strengthen its role as a partner of choice, enhancing customer productivity and operational reliability. Future guidance remains optimistic, with expectations of further growth driven by technology leadership and product innovation. Analysts project a 6% upside to current levels, reflecting confidence in the company’s strategic direction. For deeper insights into RHIM’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, one of 1,400+ US equities covered with expert analysis and actionable intelligence.
Executive Commentary
Management emphasized the strategic shift towards value-added solutions, with the 4PRO platform being a key differentiator. “We are witnessing a transformation in the refractory business, moving from a commodity-based approach to offering integrated solutions,” stated the CEO, highlighting the company’s commitment to innovation and sustainability.
Risks and Challenges
- Margin pressures due to rising raw material and energy costs.
- Competitive pricing behavior from industry peers.
- Geopolitical uncertainties affecting export demand.
- Overcapacity in the market leading to pricing pressures.
- Currency depreciation impacting costs.
Q&A
During the earnings call, analysts raised concerns about the impact of geopolitical disruptions on export demand and the company’s strategy to mitigate margin pressures. Management reiterated their focus on cost optimization and strategic sourcing to address these challenges.
Full transcript – RHI Magnesita India Ltd (RHIM) Q4 2026:
Conference Moderator, Conference Moderator: Please note that this conference is being recorded. Before we get started, I would like to point out that some statements made or discussed on today’s call may be forward-looking in nature and must be viewed in conjunction with risks and uncertainties that we face. The company does not undertake to update these forward-looking statements publicly. I now hand the conference over to Mr. Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer from RHI Magnesita India Limited. Thank you, and over to you, sir.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Thank you very much. Good morning, everyone, and thank you for joining us today. Financial year 2026 was a resilient year for RHI Magnesita India, a year that demonstrated the strength of our strategy, our business model, and discipline of our execution. Despite operating in a challenging environment characterized by pricing pressure, inflationary cost trends, industry overcapacity, and intense competition, we delivered our highest-ever annual revenue, surpassing INR 4,000 crores for the first time in history, as well as in Indian refractory industry. More importantly, we achieved this while strengthening our customer relationships, enhancing operational reliability, generating robust cash flow, and maintaining disciplined capital allocation. Our performance reflects more than resilience. It demonstrates our ability to consistently create value while advancing our vision of driving progress in an ever-changing world. The industry landscape in India continued to undergo a structural transformation.
Government-led infrastructure investments, manufacturing expansion, supply chain localization, and increasing industrial satellite are creating significant long-term opportunity across steel, cement, non-ferrous metals, and energy infrastructure. As these industries expand and modernize, the importance of high-performance refractory solutions continue to increase. Against this backdrop, RHI Magnesita India Limited remained a trusted partner to customers, ensuring uninterrupted supply and operational reliability even during periods of geopolitical disruptions, including the Middle East crisis. Let me briefly touch upon the industries that continue to drive our growth. India further strengthened its position as the world’s second-largest crude steel producer during financial year 2026, supported by the robust infrastructure spending, rapid urbanization, and sustained government capital expenditure. Steelmaking capacity has now reached approximately 165 million tons and inching towards 300 million tons as government policy states.
Steel remains our largest business segment, and we continue to strengthen our leadership position across integrated steel producers, country steel manufacturers, and public sector customers through our comprehensive refractory management capabilities and customer-centric operating model. During the FY 2026, we further expanded our presence in the ironmaking and flow control segment through specialized products, enhanced localization, strong project execution capability, and deeper strategic partnership with customers. One of our most important strategic differentiators is our growing focus on integrated solutions through our 4PRO platform. By combining refractory products with automation, robotics, digital monitoring, scanning technologies, process optimization, recycling, and CO2 reduction initiatives, we are helping customers to improve productivity, reliability, sustainability across their operations. Importantly, customers are increasingly recognizing the value of this integrated approach.
During the year, we secured long-term agreements under the 4PRO framework and received highly encouraging customer feedback, validating both the relevance and effectiveness of our solution. Our objective is clear: to become the partner of choice rather than simply another supplier. Technology leadership continued to be a key growth driver of our business. During financial year 2026, we successfully implemented India’s first fully integrated robotic solution in caster operations, an important milestone for both our company and the industry. We currently operate two robotic systems successfully and remain confident about expanding our automation footprint through additional deployment in the coming year. Turning to the cement sector, industry growth remains resilient during 2026, supported by infrastructure investment, recovering in housing demand, GST rationalization, and continued government focus on economic development. This sector continued to provide meaningful diversification to our portfolio while strengthening our industrial business franchise.
At RHI Magnesita, we firmly believe that the future of refractory industry extends well beyond product pricing. Historically, refractories have often been viewed as a commodity business. However, we are witnessing a fundamental shift toward a de-commoditization, driven by technology, integrated solutions, performance-based partnerships, and increasing customer resilience or specialized expertise. This transformation lies at the heart of our core strategy. Financial discipline remains a cornerstone of our operating philosophy. Despite market volatility, we generated strong cash flow during the year through prudent capital allocation, disciplined investments, and continued focus on working capital efficiency. Our ambition extends beyond growth alone. I’m also proud to share that during the year, RHI Magnesita was recognized with the prestigious CSR award from the Government of Andhra Pradesh and from Government of Tamil Nadu Pollution Control Board for environmental excellence. These recognitions reflect our unwavering commitment to responsible and sustainable growth.
As we move forward, our priorities remain clear: driving profitable growth, expanding our technology leadership, strengthening customer partnerships, accelerating sustainability initiatives, and maintaining disciplined execution. The foundation of our business has never been stronger, and we remain confident in our ability to create long-term value for all our stakeholders. With that, I would now like to hand over to Mr. Azim, who will take you through our financial performance in detail. Thank you very much.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Thank you, Parmod ji, and good morning, everyone. Let me take you through our financial performance for the fourth quarter and full year FY 2026. FY 2026 was a year of strong top-line growth, continued market share gains, disciplined cash generation, and strategic investments despite one of the most challenging operating environments the industry has faced in recent years. Revenue from operations increased 9% year-on-year to INR 4,000 crores, while shipments grew 5% to 523 kilotons. Our growth was broadly based on three key factors. Strong growth in ladle solution and electric arc furnace projects, continued expansion in conditioned ladle slide gate solutions, increased demand in the iron making segment supported by MIP, COCO1, and PRA projects. These gains enabled us to further strengthen our market position despite a highly competitive market environment. FY 2026 was characterized by significant industry headwinds.
The refractory market continued to face excess capacity, aggressive pricing behavior, rising raw material costs, elevated freight and energy expenses with increased commoditization. Against this backdrop, our focus remained firmly on protecting market share, strengthening customer relationship, and building long-term value through differentiated solutions. For this quarter, revenue stood at INR 932 crores, reflecting the impact of geopolitical disruption and a softer cement demand cycle, broadly in line with the guidance we had provided earlier. Adjusted EBITDA for the quarter was INR 113 crores, with EBITDA margins of 12.1%. Adjusted profit after tax before exceptional items stood at INR 39 crores. During the quarter, we recognized an impairment of goodwill relating to RHIM IR.
This was driven by a reassessment of medium to long-term growth expectation, considering a combination of factors including weaker export demand amid geopolitical uncertainties, persistent currency depreciation impacting raw material costs, increasing industry capacity additions, heightened competition from imports, and continued inflationary pressures across key cost categories. While these factors impacted profitability during the year, it is important to note that they do not alter our long-term strategic direction or our confidence in the underlying growth opportunities available to the business. For the full year, adjusted EBITDA stood at INR 477 crores, with EBITDA margins of 11.9% compared to 13.7% in FY 2025. Adjusted profit after tax for FY 2026 was INR 180 crores. Although margins moderated during the year, our profitability remained resilient considering the magnitude of industry-wide cost inflation and pricing pressure.
For FY 2026, we have earmarked approximately INR 135 crores of capital expenditure focused on operational excellence, product innovation, selective capacity enhancement, automation, and sustainability initiatives. These investments are aligned with our strategy of driving long-term profitable growth while enhancing returns on capital, strengthening our competitive position, and supporting future earnings potential. Turning to cash flow and the balance sheet, one of the most encouraging aspects of our FY 2026 performance was our strong cash generation. Cash flow from operation increased 9% year on year to INR 409 crores, supported by disciplined working capital management and improved cash conversion across the business. As a result, we further strengthened our balance sheet and ended the year in net cash position with net debt to EBITDA entering to net cash positive at 0.1x.
This achievement underscores the quality of our earnings, the strength of our operating discipline, and our ability to generate cash even during periods of market volatility. Our balance sheet remains robust, highly liquid, and well-positioned to support future growth initiatives while maintaining financial flexibility. Looking ahead to FY 2027, we remain constructive on both growth and profitability. We see multiple drivers supporting margin improvements and earning growth in the coming year. First, improved demand across core end industries. Second, progressive implementation of price increases across selected products and customer segments. Third, continued cost optimization through recipes, recycling, and strategic sourcing programs. Fourth, expansion into new industrial segments, including petrochemicals, following the Resco acquisition. Fifth, greater penetration of our 4PRO platform enabling high value-added solution, improved realization, and stronger cost pass-through mechanism. The last one would be improved fixed cost absorption, supported by stronger coke oven projects order book and increased operation leverage.
In closing, while FY 2026 presented significant industry challenges, it also demonstrate the resilience of our business model, the strength of our customer relationship, and the effectiveness of our strategic priorities vis-a-vis the competition. With a stronger balance sheet, growing market share, robust cash generation, and improved growth visibility, we enter FY 2027 with confidence and remain committed to creating sustainable long-term value for all of our stakeholders. Thank you for your continued trust and support. We’ll now be happy to take your questions.
Conference Moderator, Conference Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the touchtone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Participants may press star and one to ask question. The first question is from the line of Gaurav Khanna from CapGrow Capital. Please go ahead.
Gaurav Khanna, Analyst, CapGrow Capital: Good morning. Can you hear me?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Yes.
Conference Moderator, Conference Moderator: Yes, sir.
Gaurav Khanna, Analyst, CapGrow Capital: My first question is that, is all the restructuring done, and what is this impairment of goodwill, and what is the roadmap going for FY 2027 and 2028?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: I’m sorry, your voice was breaking, but if I understand, you’re asking how much was the goodwill and is there anything upfront? Did we capture the question correctly?
Gaurav Khanna, Analyst, CapGrow Capital: Sir, I’ll ask again. I’m asking that, what was this impairment regarding goodwill for?
Conference Moderator, Conference Moderator: I’m sorry. Sir, can I just request you to use headset, please? Your voice is not audible properly.
Gaurav Khanna, Analyst, CapGrow Capital: Not audible, sir? Hello? Hello.
Conference Moderator, Conference Moderator: Please go ahead, sir.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: You are audible, but.
Gaurav Khanna, Analyst, CapGrow Capital: Sir, I’m asking that, what is the roadmap for FY 2027 and FY 2028 going forward? Apart from that, this goodwill impairment, what you have taken, what is exactly that, and how do we look to improve margins in a very competitive market?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Thank you so much for the question. You asked three questions, let me try to do this in sequence. First thing is basically our outlook is that we still believe that from a growth perspective, we will outbid the market by 2%. We say this with a lot of confidence now because our growth area is coming in, ironmaking, DR and pellet business. I’m happy to report out that we have a strong order book for next 18 months. We have secured one of the largest Coke oven projects, with one of the largest industry integrated steel players. This will ensure that our fixed cost gets absorbed. Plus, we are able to kind of grow in the significant area. We are confident about the growth for next year with a firm order book in our hand.
As you know that we have long-term contracts called 4PRO contracts. This means that most of the organic growth is also secured. On the margin side, at the moment, we are actively seeking price increases because of the recent input cost increases with our customer. We are also happy to report out that we were quite successful in receiving most of the price increases where we were targeting the particular product and customer segments. We should see all these tailwinds coming through in Q1 and also in Q2 as well. To summarize this, we will have a better growth percentage that is +1%-2% than what the market is saying in terms of steel or cement production.
Second, our margins will be far more better than what we have achieved in the last quarter, which is basically Q4, with the price increases and with the ironmaking fixed cost absorption that we were mentioning. On the goodwill impairment, basically, we took an assessment of the recent market changes that have happened. We basically saw that our exports volumes were reducing quite significantly. Second, on the FX side, there is quite a bit of a deterioration and unpredictability because of geopolitically. We have to consider that because most of the raw material purchases, not only for RHI Magnesita but globally, the business is done in USD. As you know that INR and USD has the highest amount of volatility, we consider this factor. The third factor also basically is that the amount of new capacities that have been announced by the competition.
Now, we believe that these three factors, along with the inflationary pressure, which also will be felt by our customers, we took a very prudent view and a conservative view. We basically said, how much of this will commoditize the business in some specific areas and some specific segments. With this in mind, we prudently went for the impairment of the goodwill on the Dalmia assets only. Hope we answered the questions.
Gaurav Khanna, Analyst, CapGrow Capital: Okay. Last question is that going forward, any more restructuring is pending or it is done now?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: It is done. Yeah, it is done. It is all done. No further restructuring is required.
Gaurav Khanna, Analyst, CapGrow Capital: Hello?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Yes.
Gaurav Khanna, Analyst, CapGrow Capital: Hello?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Hello. Did we get-
Gaurav Khanna, Analyst, CapGrow Capital: Yeah, sir. I was checking any more restructuring is pending or everything is done right now?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: It is cleaned. No further restructuring is required, and we say this with utmost confidence. Hope you are able to hear our answer.
Gaurav Khanna, Analyst, CapGrow Capital: Okay, sir. Thank you. Thank you, sir.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Yeah, thank you.
Conference Moderator, Conference Moderator: Thank you. The next question is from the line of Ganeshram Jayaraman from Avendus Spark Institutional Equities. Please go ahead.
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: Sir, good afternoon. Am I audible?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Yes, you are.
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: Sir, my first question is related to the Coke oven project. You mentioned that that is one of the main projects which we see in order book for the next 18 months. My question comes like whether this is a project CapEx on client side or it is an operational one where we get order even after that 18 months. It’s a continuous operational supply for them or it’s a one-time supply where they use it as a project CapEx.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Coke oven is always a project, but there’s not any CapEx required. This is a normal production process, and we got some 30,000 plus order. It’s a huge tonnage. With our mining now, we transfer in our name, and earlier we were buying from the market at almost double the price of our mining cost. With this order in place, mining in our name, we will not only absorb our fixed cost, we will have better margins also because of our own mining. After 18 months, we believe there are four or five more coke ovens that are coming up, and we are very sure we will continue getting those projects, and this will at least continue for next three, four years’ time when it comes to coke oven.
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: Sir, I could not get it. If four or five more projects comes, that means for us to increase our supply, we should have more coke ovens under us? Will one coke oven give us continuous supply order?
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: This order is for two coke oven batteries. Five more coke oven batteries are coming up in next two, three years’ time. We believe that we will get at least two more out of these five. Very conservative approach. Another, say, 18 months after this 18 months, we will be able to continue with this high level of production with the fixed cost absorption and with our own mining, better margins.
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: Post that 18 months, whichever you’re saying, we can assume the 30,000 tons still will be with us, and it can increase with more coke oven coming in.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Absolutely.
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: Got it, sir. Thank you. Sir, my second question is on inventory side. Last time, we had a commentary that higher cost inventory has been absorbed by Q3, and this can support going forward in terms of margins. Has this been the case in Q4, sir? Did we see some inventory benefit coming in?
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Actually, it’s offset by high cost inventory, which is coming up for our basic refractory, primarily fused magnesia and DBM. High alumina inventory, which was high cost, is already consumed and we are at a market level, pricing. This magnesia-based products has gone up because of energy cost increase in China, freight increase, et cetera, which impacted Feb and March shipments. I believe it will continue with this inflationary environment. At the same time, we reach out to our customers, as Azim said, and customer realize that absolutely this is necessary. If we want to continue the supply, we need to agree to price increases and we, in some cases, even got double-digit price increases. This will offset our inventory high cost values, rather it will give us a bit of margin advantage as well.
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: Okay. Thank you, sir. Sir, my last question comes on growth aspect. I heard the commentary right now that we would be doing 2% higher compared to the market. This 2% outperformance would be on the volume terms or how do we-?
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Yeah
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: compare this?
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Actually, we should always consider volume because pricing is dynamic. It keeps on changing depending upon raw material pricing, Forex, freight, et cetera. We should consider only volume. If the market is growing by 6%-7%, we will be growing at 9%.
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: Sir, with the inventory which we have right now and the order book which you have projected or which we have right now and the price increases which we are taking in the market, what is our outlook on the EBITDA going ahead, sir? Margins.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: We are projecting for next year 13% EBITDA.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Exactly. Just to add on this, for full year it’s 13%. Normally our business is cyclical, please bear this in mind. There will be some strong quarters and Q4 is not usually a strongest quarter. You can see this historically as well. Yes, for full year, please take the number as 13%.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Q1 we believe it should be a stronger quarter.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Agree. 100%.
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: Understood, sir. Sir, when we say that we are going to outgrow the market by 2%, generally, what do we consider the volume of market in terms of refractories? Would it be like a steel market growth, that into consumption plus 2%? How do we generally say this outperformance, or how do we benchmark this comparison, sir? I can also put it in this way. If you take FY 2026 as an example, what was the growth which the market had, and how did we perform against that in terms of volume?
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: It was almost at par. I believe the market grew by 6%. Our volume growth was about 5%. A little bit of, I would say, below market. Why so in Q4. Q3 was okay. Q4, there was some cyclic, as Azim said. The cement is a lean period from October to December, even January. That was the reason, volume-wise, we were a bit low. Q1, we should be back with the 1,000 plus volumes again.
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: Okay. Thank you, sir. Sir, where do we refer this 6% industry growth, sir?
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: It is a combination. I’m not saying only steel. It is steel, cement, non-ferrous, glass. Put together everything, the average growth is about 6%. Steel maybe grew by 8%.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Exactly.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Right? Non-ferrous is 4%. It’s the combination of all the pieces where we are supplying various segments.
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: Okay, sir. Sir, thank you for answering all my questions.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Welcome
Ganeshram Jayaraman, Analyst, Avendus Spark Institutional Equities: the upcoming year.
Conference Moderator, Conference Moderator: Thank you. The next question is from the line of Sahil Sanghvi from Monarch Networth Capital. Please go ahead.
Sahil Sanghvi, Analyst, Monarch Networth Capital: Good morning. Am I audible?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Barely, Sahil. We can hear you partly. We can hear you, but not clearly. Please continue. We’ll try.
Sahil Sanghvi, Analyst, Monarch Networth Capital: Yeah. My first question is, if you can help me understand what is the total revenue that we have achieved in the Dalmia assets and the margins for FY 2026, just to get a broad understanding of how we have grown on that asset. The second question would be to understand, as we’ve mentioned in the presentation that there is huge competition in the cement side also, and we’ve lost some bit of business. What’s exactly happening over there? How are we trying to regain some of the business, and what will be our focus points when it comes to the cement side? Thank you.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: We grew in Dalmia asset by 14%. Revenue was INR 1,153 crore as against INR 1,013 crore of FY 2025. It is a 14% growth in that particular segment, and revenue has gone up to 10.8% against 11.5%. Revenue, we grew by 14% and EBITDA is almost at the same level and not much difference. What about cement you are saying, I would be very specific that competition has put up lot of capacity in last one and a half years or so, and now this is under production now. For example, our competition, Calderys, IFGL, even smaller players, they try to fill up their plant at any cost. That put a lot of pressure on us also. It will continue, I would say, the overcapacity will definitely put pressure on commodity business.
We are trying to get out of commodity type of a business to more solution-oriented business where we can add value to the customer. We are talking to even our cement big customer, how we can add value to them instead of just supplier-buyer relationship, can we have their solution partner? The response is very good, and we are trying to de-commoditize this segment also to get back to the desired level.
Sahil Sanghvi, Analyst, Monarch Networth Capital: Got it.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Just to add on to that.
Sahil Sanghvi, Analyst, Monarch Networth Capital: Yeah.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Go ahead.
Sahil Sanghvi, Analyst, Monarch Networth Capital: Go on, Azim. Yeah, go.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: I’m basically saying that our cement, as a percentage of revenue from FY 2025 to 2026 also dropped because of this overcompetition. In FY 2025, we had about 13%. Now it’s at about 11%, just to give you a full year flavor. We choose to do only the business that makes sense for us.
Sahil Sanghvi, Analyst, Monarch Networth Capital: Got it. Just to get the margin number right, if you can reiterate what was the margin number in FY 2026 at Dalmia?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Sorry, can you repeat? 10.8%.
Sahil Sanghvi, Analyst, Monarch Networth Capital: The EBITDA margin.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: At 10.8%, yeah.
Sahil Sanghvi, Analyst, Monarch Networth Capital: 10.8.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: 11.
Sahil Sanghvi, Analyst, Monarch Networth Capital: Okay. Thanks. Yeah.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Sahil, you must appreciate that from last four quarter or so, we are consistently delivering double-digit EBITDA. We started with almost 4% when we acquired.
Sahil Sanghvi, Analyst, Monarch Networth Capital: Agreed, sir. Great efforts on that side. Sir, we were planning some refurbishment in the Dalmia assets. What plans on that front and with respect to the CapEx number, absolute number for FY 2027, how much we’ll spend across the complete facilities?
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: We continue restructuring or modernizing our Dalmia assets, which were in pathetic situation. At the same time, we are very prudent, very thoughtful how much we are to spend, how much will be the payback period for that particular asset. We spend about INR 100 crores in FY 2026, the CapEx for FY 2027 is around INR 150 crores or so. It is not limited to only Dalmia plant. Overall, INR 150 crore, that’s what we are assuming. It will also have some CapEx for Bhiwadi, Jamshedpur also, not only limited to Dalmia plant.
Sahil Sanghvi, Analyst, Monarch Networth Capital: Sure, sir. Thank you so much, and all the best, sir.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Thank you, Sahil ji.
Conference Moderator, Conference Moderator: Thank you. The next question is from the line of Kunal Kothari from Nuvama Wealth Management. Please go ahead.
Kunal Kothari, Analyst, Nuvama Wealth Management: Yeah, thank you for the opportunity. My first question is in regard to the other expenses that we have seen rise in the quarter four of this FY 2026. Just wanted to understand much more in detail that is the West Asia conflict has led to any one-off increase in the overall expenses. Do you see it to continue for next couple of quarters?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: I will basically say that, yes, West Asia conflict has increased the input cost, but it’s mostly reflected in your raw material or material cost. We also saw some elevated increases in our freight, especially whatever is getting overseas. There was an immediate surge which we had to take on our books. These are cost increases for which we are seeking price increase now. We believe that the price increases we have secured will be effective as of May onwards. Okay. That’s the first thing. On top of it, we have one more continuous cost. As you know that we are starting with these 4PRO contracts. As Parmod ji was mentioning that we signed three 4PRO contracts. In 4PRO contracts, you always have a startup cost as well. Example, in terms of people deployment, machine deployment, and so on and so forth.
This is something that will happen for which we will get the margins and revenue in the upcoming quarters. These are your continuous costs, which you are seeing in the other expenses. On top of it, we had one-off cost, which basically was some of the legal costs that we had, which allowed us to help us to get the mines transferred on our name, and we had some of our transactions with the acquired entity that we had to close. These were some of the one-off costs also that were featured in the other expense.
Kunal Kothari, Analyst, Nuvama Wealth Management: Okay, sir. Sir, secondly, about the CapEx in FY 2027/2028, can you give some color on that, and also about the leverage management that you see over the next two years?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: On the CapEx side, basically, we are looking at INR 150 crores of CapEx, of which maintenance CapEx would be around INR 40-50 crores of it. Rest all, we are dividing into two parts. One basically is that with these new 4PRO robotics kind of a machinery, so we’ll have some build CapEx, which will have immediate benefit for us and some structural growth CapEx that we will be deploying. That’s how we are thinking about our CapEx for the upcoming year. On the leverage, as you can see that we are absolutely cash positive. Everything will be funded from our balance sheet. We have some growth plans. That’s where we’ll be deploying CapEx, not on any big transactions at the moment.
Kunal Kothari, Analyst, Nuvama Wealth Management: Okay, sir. That’s it. Thank you, sir.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Welcome.
Conference Moderator, Conference Moderator: Thank you. A reminder to all the participants, you may press star and one to ask questions. The next question is from the line of Rajesh Manjunath from 360 ONE Capital. Please go ahead.
Rajesh Manjunath, Analyst, 360 ONE Capital: Good morning, Parmod ji. Good morning, Azim.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Good morning.
Rajesh Manjunath, Analyst, 360 ONE Capital: I was just wondering, could you explain a little bit on the fixed cost increase because your gross margin seemed to be decent, but the employee costs and other expenses, you did highlight about some legal expenses, but what is the quantum of fixed cost increase we’ve seen on account of the iron making that you highlighted? That was my first question.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: The question was not clear, but we heard the first part that you’re asking about the thing. Can you repeat the question part alone?
Rajesh Manjunath, Analyst, 360 ONE Capital: The question is, I want you to quantify the impact of the ironmaking fixed cost that you highlighted at the beginning of the call. How much was the impact of that on the quarterly numbers?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Basically, what do I mean by that is that, Okay, so we are not going to give that separate carved-out number on a fixed cost absorption. That, I think we’ll not do that, Rajeshji. Basically, what we wanted to say was that the message we want to give on the Coke oven, to be very precise on the projects, basically is that, A, as you know that this is project in nature, so we have secured the order book, which will keep our line continuously running rather than running only for maintenance related projects. This will ensure that our fixed cost is always managed well. As you know, you are following refractory pretty closely. Wherever we have a kiln, that’s where refractory guys have the higher fixed cost.
Now that we are able to secure this for 15 to 18 months continuous order, our message basically was that first lever that we see that, A, we will have a revenue upside, B, normally these coke oven projects are of better margins than other businesses that we have in the ironmaking area. B, we will also get a better fixed cost absorption. D, we also have the mines being transferred. We were sharing that highlight.
Rajesh Manjunath, Analyst, 360 ONE Capital: Okay. You have been talking about your margin guidance coming down gradually over the last few quarters. At one point of time, it was 15%-16%. Now it was 14% last quarter, and now it is 13%. Where do we see the end of this? Is it going to 10% in the industry because it is a fiercely competitive industry? Are we looking at a worsening scenario or improving scenario? Because we’ve been gradually coming down on the EBITDA guidance over the last few quarters.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Rajeshji, the market is so dynamic. The geographical situation is so drastically changing. We have to adapt to that. The 13%, to me, is a number where we believe we can deliver because of our various initiatives which we have taken. If we could not have worked on this, what you are saying, it might have gone to 11%, 10% also. We are taking a lot of initiatives to maintain our margins from 13.7% to now it is 12.1%, and then we are saying we will go back to 13%. It’s challenging, but we know we have order book, we have mines with us now. It will improve our margins. We have a strong order book. We have 4PRO, three contracts we sign in January only in this year, which will increase later part of the year, the margins also.
There are some levers based on that. We are sure we will be able to deliver 13% also.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Yeah. We are also seeking price increases as well. There is a good amount of understanding from our customers that this is coming because of the input cost increases. We believe that this will, of course, improve our margin. I’m guessing that because there’s a realization on the customer side, we are talking about the broader market also. Maybe there is little bit of a short-term breather there. Again, we can’t talk about all the competition because they are operating in specific segments. We have a broad diversity, which basically means that we are able to absorb the shocks better, which you can see in our cash flow statement and the overall resilience of going in continuously in double digits vis-à-vis some of the niche players who are basically further deteriorating, even though they command a stronger market position in some specific segment packages.
Rajesh Manjunath, Analyst, 360 ONE Capital: This 13% you are talking, does it include any project orders like glass, aluminum, or is it without that?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Yes. Apart from the coke oven project, as we had informed you earlier, last financial was the worst in the non-cement industrial area. We had not secured any big projects, but now we see some order book on this as well. We have also converted few of them. Yes, this 13% includes the industrial non-cement project as well.
Rajesh Manjunath, Analyst, 360 ONE Capital: Okay. Parmod sir said that the first quarter could be even better compared to the average of 13% earlier. What is the reason for that? Any project order kind of spillover has happened from Q4 into Q1?
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: There are some pending price increases, which we believe we will get in May, June, and that is one reason. Second is what Azim was saying, the price increases which we are asking for is starting from May. If we get those price increases, it will definitely help us. The cement season starts during this time, May, June, July, August, September. This is cement season also.
Rajesh Manjunath, Analyst, 360 ONE Capital: Is it possible to give some color on the price increase? Is it 5%, 7%?
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Let’s put it like this, that vis-à-vis our cost increases, we are basically asking for 1%-3% of price increases depending on the categories or the segments that we are operating. Let’s say that our cost increase is zero, then we are basically asking 1%-3%. Again, it depends on the segment.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: I hope the customers are not listening this.
Rajesh Manjunath, Analyst, 360 ONE Capital: Yeah. If I could sneak in a last question. Sir, alumina prices have been low, but magnesite has been rising.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Yes.
Rajesh Manjunath, Analyst, 360 ONE Capital: Is that a positive cycle for us, given the fact that we mine a large part of the global magnesite in RHIM globally? Yeah, last question.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Actually, the raw material price increase is good for the industry. Our refractory industry will grow much faster, revenue will go up, margin will be improved. For sure, these are good development as long as we pass on these cost increases to our customer. When it is of magnesia, it is mostly steel-related or even cement where the bigger kilns are there, where they are using hard magnesia bricks. This is a good sign for us, I think.
Rajesh Manjunath, Analyst, 360 ONE Capital: Okay. Thank you.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Thank you.
Azim, Chief Financial Officer / Finance Lead, RHI Magnesita India Limited: Thank you.
Conference Moderator, Conference Moderator: Thank you. As there are no further questions from the participants, I would now hand the conference over to Mr. Parmod Sagar for closing comments. Over to you, sir.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Thank you very much, dear investors, analysts, for your kind support till now, and we hope you will continue supporting us. We assure you we will do our utmost to increase our revenue, our margins. That is our core, and we are working on that. Various initiatives have been taken by the regional leadership team, how we can absorb costs, reduce our input costs, reduce rejections, increase our circular economy, and deliver good results to all of you. Thank you very much. Stay blessed. Have a nice weekend.
Conference Moderator, Conference Moderator: Thank you. On behalf of RHI Magnesita Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
Parmod Sagar, Chairman, Managing Director, and Chief Executive Officer, RHI Magnesita India Limited: Thank you.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.