MIDHANI - Mishra Dhatu Nigam Limited Share Price

The management of Mishra Dhatu Nigam Limited (Midhani) provided an optimistic outlook during the Q2 FY26 Earnings Conference Call held on November 14, 2025. The company reported a turnover of INR 209.73 crores for the second quarter of FY26, a decrease compared to INR 262.12 crores in the same period last year. For the first half of FY26, turnover was reported at INR 380.22 crores, down from INR 425.57 crores year-on-year. However, the value of production increased to INR 256.38 crores in Q2 FY26, culminating in a total of INR 497.67 crores for the first half, reflecting a growth of 3.9% year-on-year.

Notably, the profit before tax for Q2 was INR 19.13 crores, with a profit after tax of INR 12.77 crores. The margins remained stable, with EBITDA margins at 21.82% and PAT margins at 6.73% for the first half of FY26. The order book position was robust, standing at INR 1,869 crores as of October 1, 2025, which offers visibility for future growth.

Major forward-looking points revealed by management include:

1. Metal Bank Initiative: An MOU was signed on November 10, 2025, to create a metal bank to mitigate supply disruptions and ensure a steady supply of essential materials for production.

2. Bulletproof Jacket ABHED: A new bulletproof jacket technology was developed in collaboration with DRDO and IIT Delhi. This jacket aims to significantly increase future orders for body armor.

3. Order Book Growth: The management anticipates a strong revenue ramp-up in H2 FY26, with a target to achieve a turnover of INR 1,300 crores by year-end, driven mainly by orders in super alloys and titanium alloys, with a collective order book exceeding INR 1,000 crores in these segments alone.

4. Future Growth Projections: The management expressed optimism about achieving at least 10% year-on-year growth in revenues, with expectations for a potential long-term target growth rate of 20% once infrastructure expansions are implemented.

Overall, despite a temporary setback in revenue, Midhani's management is confident about achieving their operational goals and maintaining a robust growth trajectory moving forward.

Major Questions and Answers from the Earnings Transcript

Question 1: Sir, I've got a few questions. So with respect to the decrease in revenue, can you give some further explanation?

Answer:
The decrease in revenue can be attributed to the nature of our order processing times. Our order book includes steel, super alloys, and titanium alloys, with processing times varying from 2 months for steel to 4 months for super alloys. Thus, even if we produce in one quarter, sales may only reflect in the following quarter, leading to increased inventories.

Question 2: Could you give an update on the advanced ultra-supercritical thermal power project?

Answer:
Midhani has developed a nickel-based super alloy grade (740) in collaboration with research institutions. We have successfully melted and processed this material into tubes, which are tendered by BHEL. We expect to supply these tubes, reinforcing our role in thermal energy projects.

Question 3: What is the expected change in our order book ratio between defense and non-defense sectors?

Answer:
Currently, about 70% of our orders come from defense, 20% from space, and 10% from energy. We anticipate that as energy projects develop, the ratio will shift. In the next 2-3 years, we expect a gradual lowering of the defense share to accommodate increased contributions from energy and space.

Question 4: Can you provide a revenue mix between steel, super alloys, and titanium alloys?

Answer:
The revenue mix is as follows: super alloys at 21%, titanium alloys at 19%, maraging steel at 15%, and specialty steel at 37%. The remaining 8% consists of other grades. This composition aids our strategic product planning and diversification in markets.

Question 5: Are you still confident in achieving the FY '26 top line guidance of INR1,300 crores and EBITDA margin of 23% to 25%?

Answer:
Yes. We are focused on our target of INR1,300 crores, with significant orders in titanium and super alloys contributing to this goal. We expect to see an increase in processing output in Q3 and Q4, which will position us to meet our EBITDA target of 23%.

Question 6: What is your order pipeline moving forward?

Answer:
We currently have an order book of approximately INR2,200 crores, with about INR500 crores in the pipeline from tenders we've participated in. We expect to realize these orders by March 2026, further strengthening our operational capabilities.

Question 7: How do you see significant margin expansion in FY26?

Answer:
We are confident in achieving our EBITDA margin goal of 23%. Despite recent revenue declines, our margins in EBITDA, PBT, and PAT have remained stable compared to last year. We project that higher sales in the coming quarters will help sustain our targeted margins.

Question 8: What is the outlook for the Kaveri engine manufacturing program?

Answer:
Midhani is deeply involved in the Kaveri engine program, producing super alloys and titanium alloys essential for engine manufacturing. We are actively developing new grades and expect to secure significant orders as project timelines unfold.

Question 9: Can we anticipate a growth rate beyond the currently projected 10%?

Answer:
While we aim for a conservative growth target of 10% annually, our long-term capex plans could lead to significant growth, potentially reaching 20% CAGR over the next few years, depending on market conditions and order inflow.

Question 10: What is the expected order book by March FY '26?

Answer:
We expect our opening order book to be around INR2,000 crores by April 2026, considering both current orders and upcoming opportunities. This will enable smoother planning for the subsequent financial year.