RHI Magnesita India (534076) Q2 24/25 earnings summary

Executive summary

• Indian economy performed satisfactorily in H1 FY25, but some indicators signal a weaker environment, requiring close monitoring of demand conditions.

• Achieved resilient EBITDA margins despite dynamic market conditions and raw material cost pressures, particularly in alumina-based materials.

• Strategic initiatives and strong order books in iron, pellet, and DRI segments, along with new contracts and expanded product portfolios, are supporting sustainable growth.

• Establishment of a Center of Excellence for iron making in Jamshedpur, with 10,000 MT capacity and automated lines, to be commissioned by 2027, aims to enhance automation and operational efficiency.

• Board approved unaudited consolidated and standalone financial results for the quarter and six months ended September 30, 2024.

Financial highlights

• Q2 FY25 consolidated revenue from operations was Rs. 86,706.56 lakhs; H1 FY25 was Rs. 174,582.45 lakhs, down from Rs. 191,487 lakhs in H1 FY24.

• Q2 FY25 EBITDA stood at INR 122 crores with a margin of 14.1%; H1 FY25 EBITDA margin improved to 16% from 14.9% year-over-year.

• Profit after tax for H1 FY25 was Rs. 11,879.21 lakhs, nearly flat year-over-year; PAT margin at 6.8%, up 0.6% year-over-year.

• Operating cash flow increased 22% to Rs. 25,208 lakhs compared to H1 FY24.

• Capacity utilization improved to 67% in Q2 FY25 from 61% in Q1 FY25.

Outlook and guidance

• Anticipated growth in H2 FY25 driven by customer project commissioning, infrastructure initiatives, and publicized capacity expansions, especially in cement.

• Margin guidance maintained at around 15% on a sustainable basis, despite sales mix shifts and raw material cost pressures.

• Revenue guidance not provided due to market volatility and raw material price fluctuations, but expectation to grow with the market.

• Export recovery not expected in the next two to three quarters due to weak global demand and geopolitical issues.

• Strategic investments and local manufacturing expected to support medium-term growth and margin resilience.