IFGL Refractories: Navigating Global Markets with a Strong Domestic Focus in Q2 FY26

IFGL Refractories Limited, a prominent player in the global refractory industry, has reported its financial results for the second quarter and first half of fiscal year 2026. The company demonstrated resilience and strategic agility amidst a dynamic global economic environment, marked by robust domestic growth and targeted international improvements. The management commentary highlights a continued focus on operational excellence and long-term strategic investments, even as it addresses near-term pressures on margins.

For Q2 FY26, IFGL Refractories reported a consolidated total income of INR 490.6 crores, marking an impressive 18% year-on-year growth. The first half of FY26 saw consolidated total income reach INR 947.7 crores, a 13% increase over the previous year. Despite this strong top-line performance, consolidated EBITDA margins experienced a slight contraction, standing at 8.2% for Q2 FY26 compared to 8.8% in the same period last year. For H1 FY26, consolidated EBITDA margins were 8.3%, down from 10.7%. Profit After Tax (PAT) for Q2 FY26 grew by 5% year-on-year to INR 12.7 crores, while H1 FY26 PAT stood at INR 23.5 crores, a 36% decline from the previous year, influenced by various factors including goodwill write-offs and increased expenses.

Strategic Pivot to Domestic Market Yields Strong Results

A key highlight of IFGL's performance is the success of its strategic decision to focus on the Indian domestic market. The standalone domestic business recorded a robust 27% year-on-year growth in Q2 FY26 and an even stronger 29% growth for H1 FY26, reaching INR 440 crores. This strategic pivot has transformed the company's revenue mix, with the domestic market now contributing a significant 78% of standalone revenues in H1 FY26, a substantial increase from 69% in H1 FY25. This shift has proven timely, aligning with India's position as the most dynamic growth market for steel globally, with an expected 9% annual growth in steel demand over 2025 and 2026.

Conversely, the export business experienced a decline, falling by 20% year-on-year in Q2 FY26 to INR 60 crores and by 21% for H1 FY26. This reduction is primarily attributed to a strategic re-focus towards the domestic market and moderated demand in key overseas geographies amidst broader economic slowdowns. The company's management views this as a deliberate re-prioritization of resources based on market realities.

Global Operations and Future Initiatives

IFGL's international operations presented a mixed picture. The US business showed encouraging signs of recovery, delivering nearly 25% revenue growth during the quarter, supported by strong demand and favorable tariffs. In Europe, particularly at Monocon UK, performance is improving under a new management team with an enhanced focus on core refractory products. The company anticipates Monocon UK will achieve breakeven within the current financial year or early next year, addressing previous underperformance.

To further bolster its capabilities and market reach, IFGL is undertaking significant capital expenditure initiatives. The greenfield project in Khurdha, Odisha, for Dolomite Bricks, with an estimated investment of INR 300-350 crores, is on track for completion by the end of FY28. Another greenfield project in Gujarat, a joint venture for Basic Bricks with an outlay of INR 300 crores, is currently under regulatory approval and targeted for completion by FY29. These projects are expected to unlock efficiencies and enhance operating leverage over the long term. Additionally, the Sheffield technology transfer is progressing well and is expected to be completed by December 2025, enabling the testing of imported products for shotcreting applications in India.

Outlook and Management Confidence

Management expressed confidence in sustaining growth momentum, particularly driven by the robust Indian steel sector. They anticipate global steel demand to remain stable in 2025, with a modest rebound in 2026. Recovery trends are also gaining momentum in Europe and the US. While raw material prices are expected to remain stable, the company's focus on specialization, innovation, and high-technology products positions it strongly for the future. The strategic investments in new plants and product capabilities, coupled with a strong balance sheet, underscore IFGL's commitment to long-term sustainable and profitable growth across its diversified markets.