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

Executive summary

• Achieved record EBITDA margins and highest quarterly operating margin since Hi-Tech and Dalmia acquisitions, despite subdued customer activity from heatwave, elections, and increased steel imports.

• Strategic focus on underpenetrated segments, cross-selling, and improved market share in ironmaking and flow control supported growth.

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

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

• Consolidated Q1 FY25 revenue was Rs. 87,875.89 lacs, down year-over-year, but net profit rebounded from a prior quarter loss due to absence of exceptional impairment charges.

Financial highlights

• Q1 FY25 consolidated revenue from operations was INR 878 crore (Rs. 87,876 lakh), with EBITDA at INR 157 crore (Rs. 15,690 lakh), margin at 17.9%, and PAT at INR 70 crore (Rs. 7,288 lakh).

• Operating cash flow stood at Rs. 16,032 lakh, and earnings per share was 14.1.

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

• Export revenue accounted for 9% of total revenue.

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

Outlook and guidance

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

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

• Continued focus on local manufacturing and leveraging group technology for competitive advantage.

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