RHI Magnesita India: Navigating Headwinds with Record Revenue and Strategic Gains in Q2 FY26

RHI Magnesita India Limited, a prominent leader in the refractory sector, has reported a robust performance for the second quarter ended September 30, 2025 (Q2 FY26). Despite persistent market headwinds, the company achieved its highest-ever quarterly revenue from operations, crossing the significant INR 1,000 crore mark once again. The consolidated financial results highlight a strong uptick across all segments, underscoring the company's resilient execution and solid business fundamentals.

For Q2 FY26, RHI Magnesita India recorded a revenue from operations of INR 1,035.36 crore, marking an 8% quarter-on-quarter (QoQ) increase. This was supported by a 9% QoQ rise in shipment volumes, reaching 141 kilotons. Operating EBITDA stood at INR 110.53 crore, a 7% QoQ improvement, while Profit After Tax (PAT) grew by 9% QoQ to INR 38.35 crore. The company's market position continues to strengthen, driven by notable market share gains across its diverse business segments.

Segmental Performance and Market Dynamics

The company's performance was significantly influenced by its core end markets. The steel sector, including flow control, emerged as the primary revenue driver, contributing approximately 80% to the total revenue. This segment experienced quarter-on-quarter growth in steel production, reinforcing India's global steel momentum. However, margins in this sector remained under pressure due to a competitive environment and elevated raw material costs.

The cement sector accounted for about 14% of the revenue. While this segment faced lower shipments and squeezed margins due to unseasonal monsoons, capacity expansion and recent GST rationalization are expected to drive medium-term growth. The remaining 6% of revenue came from the project order business. RHI Magnesita India also reported strengthened presence in ladles, converters, and seasonal cement orders, alongside sustained growth in Total Refractory Management (TRM/4PRO), Direct Reduced Iron (DRI), and Coke Oven segments.

Strategic Initiatives and Future Outlook

RHI Magnesita India is actively pursuing several strategic initiatives to drive sustainable growth and enhance operational efficiency. Safety remains a top priority, with a new IT-enabled Safety Management System being implemented for real-time monitoring and proactive incident management. The company is also enhancing safety and efficiency through robotics and automation, notably with India's first complete robotic solution in caster operations, a key component of its 4PRO business model. This initiative is expected to yield substantial benefits in productivity, labor cost reduction, and quality improvement within 3-4 months.

The integration of Ashwath Technologies, acquired on August 1, 2025, is progressing well. This acquisition strengthens the company's steel flow control machinery capabilities, expanding its product portfolio and fostering deeper regional customer relationships. Furthermore, RHI Magnesita India has successfully completed the product transfer of ANKRAL and Radex cement bricks from its group technology into India, which is expected to unlock further value for shareholders.

In terms of research and development, RHI Magnesita India is continuously working on new product transfers and process improvements, including high-quality Magnesia Chrome bricks, Magnesia spinel bricks, Eco grade cement kiln bricks, and Thin Slab ISO products. These R&D efforts are aimed at sustainable value creation and addressing evolving industry challenges. The company anticipates reaching 80-85% capacity utilization within the next two years, with planned capital expenditure of approximately INR 90-100 crore for the next fiscal year, primarily focused on productivity and quality enhancements rather than new plant additions.

Management Commentary and Investor Confidence

Parmod Sagar, Chairman, MD & CEO of RHI Magnesita India Ltd., expressed satisfaction with the record quarterly turnover, emphasizing the strengthening market position and the trust customers place in the company. He acknowledged the persistent market challenges, including input cost pressures, but remained confident in the company's growth momentum and long-term value creation. Azim Syed, CFO, reiterated the company's robust balance sheet and strict working capital discipline, which enable it to fund its strategy without undue leverage.

Management expects margins to improve progressively in the coming quarters due to focused cost optimization efforts, ongoing product innovation, and a shift towards a better product mix. The full-year FY26 EBITDA margin is targeted to be similar to FY25 levels, around 13-14%. The order book remains robust, particularly in the steel sector, with major mills confirming substantial capex plans. The cement segment is also expected to show strong momentum driven by large-scale expansions and scheduled plant turnarounds. Overall, the company is well-positioned to capitalize on India's industrial growth, reinforcing its role in advancing the nation's $5 trillion economic vision through a resilient and self-reliant supply chain.