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Midwest Limited FY26: Granite Stability, Quartz Ramp-Up, and a First Step Into Rare Earth Oxides

Midwest Limited ended FY26 with a steady consolidated performance and a clear message to investors: the granite business continues to fund growth, while quartz and rare earth initiatives are moving from concept to execution.

On a consolidated basis, FY26 revenue from operations stood at INR645.62 crore versus INR626.18 crore in FY25. EBITDA was INR174.37 crore with a 27.01 percent margin, broadly in line with the prior year. PAT was INR106.48 crore with a 16.49 percent margin. The quarter was more volatile. Q4FY26 revenue was INR215.81 crore, down 6.25 percent year-on-year but up 67.48 percent sequentially, reflecting a sharp recovery from Q3FY26.

The operating story behind those numbers was split into two parts. Granite remained the profit engine. Quartz, commissioned in Phase I during FY26, was still in early stabilization and weighed on consolidated profitability.

FY26 performance: stable year, sharp quarter-on-quarter rebound

The company reported a strong sequential improvement in Q4FY26. EBITDA rose to INR58.32 crore versus INR30.54 crore in Q3FY26, while the EBITDA margin improved to 27.03 percent. PAT increased to INR37.02 crore versus INR17.36 crore in the previous quarter.

Management attributed the year’s relative stability to sustained demand in its granite franchise and the company’s long-standing export orientation. In the concall, management also noted that Q4 sales were impacted by logistics constraints at the end of March, which limited dispatches.

Granite continues to dominate revenue and earnings

FY26 segment disclosure in the presentation showed granite revenue of INR643.78 crore, while quartz revenue was INR1.84 crore on a consolidated basis. This indicates that FY26 was still overwhelmingly a granite-led year.

The concall added a key clarification on profitability. The CFO stated that on a granite standalone basis, EBITDA margin was 27.55 percent and PAT margin was 17.47 percent, slightly better than the prior year’s granite margins. The weaker consolidated PAT margin was attributed to early-stage quartz costs.

Management commentary also reiterated confidence in the granite market. The CEO indicated demand remained strong in local and Chinese markets, with additional export markets opening in the Middle East. The company also pointed to its strategic advantage in Black Galaxy granite, a premium variety with unique geographic availability.

A notable operational development was the receipt of a 30-year quarry lease work order from the Department of Mines and Geology, Government of Andhra Pradesh, effective January 6, 2026, for coloured quartzite block extraction. In the concall, management said the new site had already started production and was targeted to contribute about 10,000 to 12,000 cubic meters, with an estimated revenue potential of INR70 to INR80 crore.

Quartz: ramp-up underway, Phase II capex outlined

Quartz was the key diversification initiative in FY26, but it remained in ramp-up mode.

The investor deck stated that Midwest commissioned Phase I of a quartz processing plant with installed capacity of 303,600 MTPA in Q1FY26. It also stated the intent to double capacity in Phase II and that management planned to add an HPQ line along with Quartz Phase II.

In the concall, management acknowledged that the first year included technical issues and fixed costs that impacted consolidated results. The CFO quantified the profitability drag at around INR6 crore.

Management provided specific execution markers for FY27. The CEO stated an effort to reach at least 60 percent of optimal throughput for Phase I during the year, with quarter-on-quarter improvement in volumes. He also shared indicative pricing: solar grade around INR7,000 per tonne and engineered stone grades ranging from INR9,000 to INR14,500 depending on grade.

For Phase II, management guided capex of INR125 to INR130 crore, with construction activity starting in April and commissioning targeted by Q4 of the year. They indicated that Phase II would meaningfully contribute from Q1 of the following year.

Rare earths and HMS: pilot-led entry and policy-linked timelines

Midwest’s rare earth ambition took a more concrete shape in FY26 through a government partnership.

The company said it was selected as the Lead Consortium Partner by Kerala Minerals and Metals Ltd. for a strategic technology development initiative and a pilot plant for rare earth elements. Management described this as a key step into the rare earth ecosystem. In the concall, they characterized it as a six-month pilot expected to start around early July, with a budget close to INR20 crore.

Management also laid out a possible path to commercialization. They stated that after the pilot, the government’s intent is to commercialize quickly, and a commercial plant could take about a year to build before oxides begin to be produced.

In heavy mineral sands, Midwest disclosed four exploration licenses in Sri Lanka. However, management stated there was no progress since the previous quarter due to a pending Sri Lankan policy update, expected around June. Post policy finalization, they intend to convert exploration work into a mining license and begin ground activity.

The investor deck also noted a board approval to establish a wholly owned subsidiary in Sierra Leone to support expansion of HMS reserves, though the concall indicated no material progress yet beyond studying concessions.

Takeaways

FY26 showed Midwest’s core granite business holding margins and generating stability, even as the company started investing in new verticals. The key near-term variable is execution in quartz, where utilization ramp is expected to determine when fixed costs stop depressing consolidated profitability. Parallelly, the KMML pilot provides a visible pathway into rare earth oxides, but commercialization will depend on execution and policy outcomes.

The company’s narrative is now broader than granite. But the FY26 disclosures make it clear that granite remains the base, quartz is the next operating lever, and rare earths and HMS are still at the build stage.