MIDHANI - Mishra Dhatu Nigam Limited Share Price

In the recent earnings call, management provided an optimistic outlook for Mishra Dhatu Nigam Limited (MIDHANI) with several key forward-looking points. The management highlighted that for FY '24-'25, the company achieved its highest-ever quarterly turnover of INR 410.56 crores, marking a 1.25% increase year-over-year. For the full fiscal year, MIDHANI recorded a turnover of INR 1,074.1 crores, a marginal growth of 0.13% over the previous year.

The EBITDA for FY '24-'25 stood at INR 248.97 crores, reflecting an 11.1% growth, while the Profit After Tax (PAT) rose by 20.61% to INR 110.07 crores compared to INR 91.26 crores in the previous fiscal year. The management emphasized improved inventory control, leading to a reduction of approximately INR 8.5 crores, which enhances working capital management and reduces debt.

Looking ahead, the management anticipates a significant growth trajectory, targeting a 20% growth in turnover annually, bolstered by a strong order book of INR 1,832 crores as of April 1, 2025. They also reported a nearly threefold increase in export performance compared to FY '23-'24, projecting export revenues could reach INR 100 crores to INR 120 crores for FY '25-'26. Additionally, the management expects EBITDA margins to stabilize in the range of 20%-25% in the coming years, aided by cost optimization and enhanced resource utilization, including efforts to salvage scrap materials.

MIDHANI's commitment to expanding its alloy offerings tailored for sectors such as healthcare, oil, energy, and defense signals a strategic diversification aimed at strengthening its market position in critical industries.

Questions and Answers from Earnings Call Transcript

1. Question: "What are the critical materials that we import from China, and how do we plan to manage that?"

   Answer: We do not currently import any raw materials from China. All required materials for our production, including Superalloys and Titanium alloys, are sourced through non-Chinese suppliers, so we are not concerned about supply chain issues related to China.

2. Question: "How do you see the business and top line panning out?"

   Answer: We expect robust growth driven by Aerospace and Defence sectors, projecting a 20% growth annually. Our experience in manufacturing Superalloys and Titanium alloys, paired with government initiatives, supports this optimism.

3. Question: "What are the key raw materials used, and how do price fluctuations impact margins?"

   Answer: Key raw materials include Pure Nickel, Cobalt, Molybdenum, and Titanium. Although we have faced price volatility, recent trends suggest stabilization, helping us manage costs effectively and minimizing impact on margins moving forward.

4. Question: "Can we achieve previous EBITDA margins of 25-30% in the medium term?"

   Answer: Given the current competitive landscape, we expect EBITDA margins to be around 20-25%. While improving operational efficiencies will help, we likely won't return to the peaks of 25-30% in the short term due to historic changes in customer behavior and pricing.

5. Question: "What is the production capacity of the newly commissioned Titanium plant, and what is its revenue potential?"

   Answer: The Titanium plant has a capacity of 250-300 tons per month. We project significant revenue from it due to ongoing demand from both the aerospace and Defence sectors, indicating a positive outlook.

6. Question: "Can you provide the order book breakup for Defence, Space, and Energy?"

   Answer: Our current order book of Rs.1,800 crores breaks down as follows: Defence 84%, Space 8%, Energy 2%, and others 3%. We anticipate further growth in these areas.

7. Question: "How much order inflow did you receive in FY '25?"

   Answer: We achieved an order inflow of about Rs.1,400 crores and expect an additional Rs.1,500 crores in the upcoming fiscal year.

8. Question: "Regarding the Rohtak plant, how much is the current order book and future plans?"

   Answer: The Rohtak plant's current order book is Rs.10 crores, with plans to secure an additional Rs.30-40 crores in orders, targeting Rs.50 crores in FY '26.

9. Question: "What is MIDHANI's role in the Kaveri engine project?"

   Answer: MIDHANI is the sole supplier of metals and alloys for the Kaveri engine. We have already developed numerous alloys for this critical project, which will benefit us significantly in the long run.

10. Question: "What revenue are you targeting from exports in FY '26?"

    Answer: We expect export revenues to grow significantly, projecting figures between Rs.100-120 crores in FY '26, fueled by increased orders and certifications from international customers.