RHI Magnesita India (534076) Q1 24/25 earnings summary

Executive summary

• Achieved record EBITDA and operating margins in Q1 FY25, driven by high-margin orders, improved product mix, and strategic execution in ironmaking and flow control segments.

• Revenue declined 7% sequentially and 5% year-over-year due to subdued customer activity, external factors, and cheap imports, but strong order momentum was noted in blast furnace casthouse and taphole clay segments.

• Integration of acquired entities is progressing, with a global operational excellence program rolled out to harmonize operations and improve safety and efficiency.

• Strategic focus on underpenetrated segments, cross-selling, and local-for-local manufacturing supported resilience.

• Sustainability initiatives continue, with leadership in raw material recycling and CO2 footprint reduction.

Financial highlights

• Q1 FY25 consolidated revenue from operations was INR 878 crore (₹87,876 lakh), with EBITDA up 3 percentage points to INR 157 crore (₹15,690 lakh), and margin improving to 17.9%.

• PAT for the quarter was INR 70 crore (₹7,288 lakh), with improved margins and negligible use of short-term working capital financing.

• Net debt to EBITDA ratio improved from 0.6x to 0.3x, supported by strong cash generation and efficient inventory management.

• Export revenue accounted for about 9% of total revenue.

• Volume shipment for Q1 FY25 was 114 kilotons, with a 6.8% year-over-year decline in volumes.

Outlook and guidance

• Anticipates ramp-up in steel and cement production, supported by government infrastructure initiatives and significant capacity additions in India.

• Sustainable EBITDA margin forecast upgraded to 15%+ for upcoming quarters, despite cyclicality of one-time orders.

• Short-term challenges expected from raw material cost inflation and supply chain disruptions, but long-term growth in steel demand remains robust.

• Continued focus on expanding market share in underrepresented categories and leveraging group technology.

• Financials prepared in accordance with Indian Accounting Standards and SEBI regulations.